What Is FINNIFTY? – (A Simple Guide for Beginners)
National Stock Exchange (NSE) introduced the Nifty Financial Services Index, i.e., FINNIFTY, in January 2021.
This index represents the collective performance of financial institutions, insurance companies, banks, housing finance, and other companies that offer financial services.
In this guide, we’ll learn everything about the FINNIFTY index. Read on more to understand everything about FINNIFTY.
What Is FINNIFTY?
FINNIFTY is the symbol of the Nifty Financial Services Index. It’s a sectoral index that represents the performance of financial sectors in India.
Just like NIFTY50 represents the top 50 companies listed on the National Stock Exchange (NSE), FINNIFTY represents the top 20 stocks of financial institutions, banks, and insurance companies.
Which Stocks Are In FINNIFTY?
There are top 20 stocks from financial institutions, banks, and insurance companies. The banking sector has the highest weightage in FINNIFTY, representing 63.1% of the index.
The highest weightage is held by HDFC Bank and ICICI Bank, which hold 22.80% and 18.86%, respectively.
Here is the list of stocks in FINNIFTY-
| Stock | Weightage | Sector |
| HDFC Bank | 22.80% | Banking |
| ICICI Bank | 18.86% | Banking |
| HDFC Ltd | 15.11% | Financial Service |
| Kotak Mahindra Bank | 9.72% | Banking |
| Axis Bank | 7.54% | Banking |
| State Bank of India | 6.79% | Banking |
| Bajaj Finance Ltd | 5.37% | Financial Service |
| Bajaj Finserv Ltd | 2.42% | Financial Service |
| HDFC Life Insurance Ltd | 2.35% | Insurance |
| SBI Life Insurance Ltd | 1.82% | Insurance |
| ICICI Lombard General Insurance | 1.09% | Insurance |
| Cholamandalam Company Ltd | 0.99% | Financial Service |
| Shriram Transport Finance Ltd | 0.88% | Financial Service |
| Piramal Enterprise Ltd | 0.84% | Financial Service |
| ICICI Prudential Life Insurance Ltd | 0.77% | Insurance |
| SBI Cards and Payment Services Ltd | 0.75% | Banking |
| HDFC Asset Management Ltd | 0.70% | Financial Service |
| Muthoot Finance Ltd | 0.45% | Financial Service |
| Power Finance Corporation Ltd | 0.44% | Financial Service |
| REC Limited | 0.43% | Financial Service |
Which Stock Has Highest Weightage In FINNIFTY?
The banking sector has the highest exposure in FINNIFTY, and HDFC Bank holds the highest weightage of 22.80%, followed by ICICI Bank with 18.86% and Housing Development and Finance Limited (HDFC) with 15.11%.
It means FINNIFTY will move in the direction of these banks. So, while trading FINNIFTY options, you should monitor the movement of HDFC Bank, ICICI Bank, and HDFC Ltd.
What Is the Difference Between FINNIFTY And Bank NIFTY?
The BANKNIFTY represents the performance of the banking sector in India (on NSE), while FINNIFTY indicates the performance of the banking, financial institutions, and insurance sectors.
Can FINNIFTY Be Traded?
Yes, FINNIFTY Future and Options are available to trade on various stock brokers’ platforms. You can not buy the FINNIFTY directly; rather, you trade its FNO intraday or positional.
Is FINNIFTY Good For Trading?
Absolutely, if you’ve good knowledge of technical chart reading, then FINNIFTY Future and Option are good for intraday and positional trading. However, there is still less volume compared to BANKNIFTY.
Is FINNIFTY Volatile?
FINNIFTY is a collective index for the banking, financial services, and insurance sectors listed on the National Stock Exchange (NSE). The movement of these sectors decides the performance of the FINNIFTY index.
FINNIFTY is volatile but not as high as BANKNIFTY. So, if you’re a beginner, FINNIFTY could be a good start for learning.
What Is The Lot Size Of FINNIFTY?
The lot size of FINNIFTY future and options is 40. It means you must buy a minimum of 40 quantities to trade in Nifty Financial Services F & O. While the lot size of NIFTY is 50 and BANKNIFTY is 25.
What Is The Expiry Of FINNIFTY?
The FINNIFTY derivatives have Monthly and Weekly contracts. The monthly contracts expire on the last Tuesday of each month. If Tuesday is a trading holiday, contracts will expire on the previous day.
The weekly contracts of FINNIFTY will expire every Tuesday. This means the value of OTM (Out of The Money) will go to zero every Tuesday for weekly contracts.
Can I See the FINNIFTY Chart On TradingView?
Yes, you can see FINNIFTY’s future candlestick chart on TradingView. However, if you want to see the FINNIFTY options chart on TradingView, open a free account with Fyers or Dhan.
Conclusion
FINNIFTY represents the collective performance of banking, insurance, housing finance, NBFC, and other financial services companies listed on the National Stock Exchange (NSE). The banking sector holds the highest weightage of 63.1%, and HDFC Bank has the highest contribution of 22.80%.
The index derivatives can be traded on any broker platform. There are monthly and weekly contracts for F&O, which expire every Tuesday.
