A quick introduction to NIFTY. A beginners guide to get an idea about NIFTY. Talks about BSE and NSE. Also includes the factors taken into consideration to calculate NIFTY.

1. Introduction to NIFTY
Presented by
Adnan Khan

2. What is NIFTY ?
• NSE and BSE are the two most important
pillars of Indian stock trading.
• NSE- National Stock Exchange
• BSE- Bombay Stock Exchange
• NIFTY is the major stock index introduced by
the NSE.

3. • The word NIFTY originates from 2 words, `National' and
'Fifty'. NIFTY basically means the index of the 50 most
actively traded stocks from across all sectors.
• NIFTY represents the top stocks of the NSE and when
we talk about NIFTY going up, it means that all the
heavyweight stocks of NSE across all sectors are
moving up.
• Most of the stock trading in the country is done
through NSE and BSE.

4. What does NIFTY do ?
• NIFTY consists of top 50 companies from 24
different sectors.
• NIFTY is computed from the performance of top
stocks from different sectors. Some mutual funds
use NIFTY as a benchmark.
• The performance of the mutual funds is assessed
against the performance of the NIFTY. On NSE,
futures and options are available for trading with
the NIFTY as an underlying index.

5. • NIFTY is calculated by using the market capitalization
weighted method according to which weights are
assigned according to the size of the company.
• It is used for a variety of purposes such as
benchmarking fund portfolios, index based derivatives
and index funds.
• NIFTY 50 is owned and managed by India Index
Services and Products Ltd. (IISL). IISL is India's
specialized company focused upon the index as a core
product.

6. 4 main factors are to be taken into
account when calculating the NIFTY.
• The base year is taken as 1995
• The base value is set to 1000
• NIFTY is based on 50 actively traded stocks of the NSE.
• 50 top stocks from selected from 24 sectors

7. Advantages of NIFTY
• Trader get margin to trade on NIFTY.
• Trader can do day trading that is intraday trading as well as
carry forward till the expiry period of trader contract
minimum one month expiry and maximum three month.
• If you feel that market is going up then you can buy NIFTY
contract and if you feel like that is market is falling then you
short sell NIFTY and later buy it to cover up your positions.
• Trader can square off at any time and at any price due to
very high volumes are traded in NIFTY future contract.