For the few sessions that I have been watching and practicing, it was Nifty. I have never looked at Bank Nifty. But as you all know because you do, there is a lot of content on options on YouTube wherein they take examples of BN alone, so I would like to look at BN too.
But I don’t if Nifty and BN are the same, or there are some differences which one should know before taking a trade.
Another reason I want to look at BN is because of the obvious lot size
Nifty is an index with banks and many other companies from different sectors. Bank Nifty is an index with banks alone. Nifty and Bank Nifty are 20% correlated because of common presence of banks.
Bank Nifty has higher beta or generally more volatile than Nifty.
What advantage do you intend to gain from this ? BN index is nearly twice that of Nifty. Hence the lot size is half that of Nifty.
BN is more volatile than nifty so its high risk high reward type instument than Nifty. From my experience, just start with Nifty for a year before jumping to BN .
BN offers more opportunities for traders, but it is also more difficult to predict.
Requires more margin per lot for Option Sellers, offers more premium, and can be more profitable (it is for me).
Also feels like it is more susceptible to manipulation by a group of Big players - due to the way this index is constructed.
Its a flawed argument for the reasons @t7support mentioned.
There are 5 rupees premium options available for both Nifty and BN, and if I were to take them, I would be paying less for BN due to lot size. That is my point, nothing more.
I am just talking about a buyer who has very very limited capital, and wants to buy an option in Nifty or BN, just from the perspective of money, nothing else.
Got that.
But if that is all you are concerned about, then you can also buy cheaper 2.5 Rs option in Nifty You can do what you want but “lot size” is not an “advantage”.
I just want to watch the movie, I don’t like to spend 300, and I don’t mind sitting below, so if I get to watch the movie for 30 rupees, I will take that. Perhaps you don’t.