Trading With Nifty-50 Stock

 

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Trading With Nifty-50 Stock

Author: priyasingh
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Do you invest to keep your money safe and growing well OR do you play the stock market as a pastime or to satisfy a gambling instinct?

If you really want to keep your money safe and want to earn profit with attending other occupation then You should invest in Nifty-50 stocks.

Introduction-

Nifty-50 is made up with 50 stocks(companies) of the NSE(National Stock Exchange) listing,which represent 24 different sectors of the economy.These companies are selected on the basis of market capitalization and the 50 stocks that have made the NIFTY account for about 58.64% of the total market capitalization. In fact these stocks are the most actively traded stocks in the national stock exchange and NIFTY stocks make about 50% of the total trading volume in NSE.Its Directly shows the economy of the India means if Nifty-50 perform well means all the industries are doing well.It is based on solid economic result.

It help the world to understand the complexity of the stock market.
Nifty-50 stock is the Third largest stock exchange of the world in there term of transaction.

Nifty is the secure market because it does not has so much complexity in it.People who really do not know the market they also invest in nifty because when economy good then its obvious that Nifty will rise.Many people do trading in nifty but if you are beginner then it will good to have advice with a good advisory company then will help you to be in profit.

Identification Of Right Stock-

When you first time enter in Nifty Trading Then it very important to choose the right Industry to invest your capital always do the trade in High leverage industry stocks.You can also play both sides of the market – profit from corrections as well as profit from rallies. There is also another advantage of this type of trading because it has got low brokerage and there is no De-mat cost. It is also less volatile than the individual stocks and has also excellent liquidity.

Nifty In Derivative Market:-

Derivative trading is a unique financial product that is based on the underlying instrument that may be a stock or index. In national stock exchange derivative trading was first introduced in the year 2000. For trading in the NIFTY index directly you have to derivative instruments – Nifty Future and Nifty Option. In both the cases the value of the derivative is determined by the position of the index. The Future and the Option are basically a contract between the buyer and the seller. Like any other derivative trading the NIFTY is also traded in a lot. You can either buy or sell a lot of 50 or you can trade in mini Nifty that consists of 20 units.


Nifty Futures:-

A Future contract is an agreement between the buyer and the seller for buying or selling a lot of NIFTY on a future date. For buying a Nifty Future you have to pay the margin amount of about 15% of the total price of the lot. But this margin amount most likely changes every day depending on the variation of the price in the market that is called the mark to market. When you will gain on the Future contract according to this settled price you will earn the difference and if the index goes down you can wait till the settlement date. But whatever is the price of the lot on the date of settlement you have to close the deal on that very day irrespective of the profit or loss.

Nifty Options:-

In an option contract the contract is between the buyer and the seller for buying or selling one more lots of Nifty on a future date and at a specific price. The buyer of the option pays a premium for owning the option contract and this premium depends on the current position of Nifty and the specific option that the buyer is buying. Though the buyer of the option contract is not liable to honer the option contract the seller of course is obliged to honour  the contract if the buyer is exercising the contract.

These are the two most popular ways to do derivative trading on the NIFTY index. Being one of the leading indices in the Indian stock market, the Nifty is preferred by so many investors from all round the globe along with domestic investors. But if you are a beginner in stock market investment then the derivative trading mechanics might seem to you bit complex. Moreover, as little difference in the index has great influence on the Future and Option contracts, it is also too risky to invest in the derivative trading, especially who have little fund and do not want to take chances. For them the most viable solution for entering Nifty is the index funds. These are basically mutual funds that invest in the indices and there are so many profit making Nifty funds that are worth attention.

Reason Of Investing In Nifty:- When you start trading you have the doubt to be in profit but when you do trading in Nifty then the you will have some assurance of profit.Because in nifty you can judge the market little bit earlier so the chance of loss get reduce.so while start the trading prefer trading in Nifty market.and in the beginning  of the trading try to do the with good stock tips which should be provided by faithful advisory firm.

So have all the luck for profit trading.

Article Source: http://www.articlesbase.com/day-trading-articles/trading-with-nifty-50-stock-4888875.html

About the Author

Priya Singh

Stocks Analyst

 

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