Finance Nifty Index Trading Idea 

The Nifty Financial Services Index is an index like Nifty and Bank Nifty in which you can trade in futures and options; the weekly option expiry is on Tuesday. It is an index in which banking stocks, insurance companies, financial services companies, and housing finance stocks are present.

There are a few things you should know about Nifty Financial Services.

1. Sectorial representation:

Banking stock, insurance company stock, financial services company stock, and housing finance stock are there, and the top six weights under this index are: HDFC Bank (27.13%), Housing Development Finance Corp. (HDFC) (17.51%), ICICI Bank (14.14%), Kotak Mahindra Bank (12.1 Axis Bank (6.46%), and Bajaj Finance (5.64%).

The top six weighted companies have an average weight of 80%, which means that if these top stocks move in one direction, the Nifty will also move in that direction; the lot size of the Nifty is 40.

2. Liquidity:

Liquidity in the nifty futures is good, but when it comes to liquidity infinity options, it is much better than before, but when you’re going deep in the money strike prices (Deep ITM), then you might find some difficulties in the liquidity rather than that liquidity is good in the nifty financial services.

3. Advantages of Fin Nifty Trading:

In option trading, the weekly expiry is on Tuesday, which can be a great advantage for traders who take advantage of trading on expiry and make a good amount of profit.

If you are a non-directional trader who is trading on straddle and strangle, it would be great for you to trade on fin nifty on some days, like on expiry, so you can prefer to trade on fin nifty rather than nifty on Tuesday. Even we have given strategy with rules based trading in our option strategy course and clear view which are the days you should prefer trading in Fin Nifty.

Conclusion :

Fin nifty is an important component of the Indian market because it represents the performance of banks, insurance companies, financial services companies, and housing finance companies. It's important to note that Fin Nifty can be volatile, and it should be traded with caution. Do your own research before taking any trading decisions.

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