What is Nifty and How to Trade in Nifty ?
How is Nifty calculated?
Nifty is also calculated through the free-float market capitalization weighted method. Just like Sensex, Nifty also follows a mathematical formula based to know the market capitalization. It multiples the Equity capital with a price to derive the market capitalization. To determine the Free-float market capitalization, equity capital is multiplied by a price which is further multiplied with IWF which is the factor for determining the number of shares available for trading freely in the market. The Index is determined on a daily basis by taking into consideration the current market value divided by base market capital and then multiplied by the Base Index Value of 1000.
What is Nifty
National Stock Exchange Fifty or Nifty is the market indicator of NSE. It ideally is a collection of 50 stocks but presently has 51 listed in it. It is also referred to as Nifty 50 and CNX Nifty by some as it is owned and managed by India Index Services and Products Ltd. (IISL).
Conclusion
Both Sensex and Nifty are stock market index used to determine the value and strength of the stock market. Since Nifty is more diversified and has more stocks listed as compared to BSE, more trading is done on it. However, in reality, both target the large-cap stocks and performance over the years have turned out to be similar.
Nifty official website | https://www.nseindia.com/
