Bank Nifty
Fourteen banks, one index, and the second most traded option chain in India. What is in it, how the contract works now, and why it behaves the way it does.
In short: Bank Nifty is the Nifty Bank index, a free-float market-cap weighted index of 14 large, liquid NSE-listed banks. NSE lists monthly futures and options on it with a lot size of 30 and expiry on the last Tuesday of the month. Because every constituent is a bank, the index concentrates the sector's rate and credit risk, which makes its options more volatile, and more actively traded, than Nifty's.
What the index holds
Bank Nifty is deliberately narrow: only banks, chosen for size and liquidity from the Nifty 500. Until the end of 2025 it held 12 stocks and its two largest private banks could together exceed half the index. That concentration ran into SEBI's 2025 eligibility norms for indices on which derivatives trade, so NSE Indices announced on 1 December 2025 a revision that expanded the index to 14 banks, adding Yes Bank and Union Bank of India from 31 December 2025, and capped the largest constituent at 20% with the top three at 19%, 14% and 10%. The caps were phased in over four monthly tranches to March 2026, a rebalance that moved an estimated $1.5 billion of passive money.
Weights still drift between rebalances, so on any given day the two largest banks can carry close to a third of the index. That is the single most important thing to know about how Bank Nifty trades: a results day or a regulatory headline at one of those banks moves the whole index.
The contract
| Underlying | Nifty Bank index (NSE), 14 constituents |
|---|---|
| Lot size | 30 units (from January 2026; previously 35) |
| Expiry | Monthly only, last Tuesday of the month (previous trading day if a holiday) |
| Weekly contract | Discontinued from November 2024 |
| Strike interval | 100 points |
| Style and settlement | European, cash-settled against the final settlement price |
Worked example (illustrative numbers)
Suppose Bank Nifty is at 52,000 with nine days to the last-Tuesday expiry and the 52,000 straddle (call plus put at the same strike) costs ₹1,100 in total. One lot is 30 units, so the straddle costs ₹33,000. The buyer needs the index to settle more than 1,100 points away from 52,000, above 53,100 or below 50,900, to profit at expiry; that is a move of about 2.1% in nine days. The writer of the same straddle collects ₹33,000 and keeps all of it only if the index settles exactly at 52,000, keeping part of it anywhere inside the ±1,100-point band.
Compare Nifty at 24,000 with a comparable nine-day straddle at ₹600: a lot of 65 units costs ₹39,000, and the required move is 600 ÷ 24,000 = 2.5%. The percentages tell you which chain is pricing more movement; the rupee amounts tell you the capital each needs. Both numbers change with every lot-size revision and every shift in implied volatility.
Why it matters to an options trader
- Volatility. Bank Nifty's implied volatility runs structurally above Nifty's, so its premiums are richer in both directions. Writers earn more per lot; buyers need bigger moves.
- Clear drivers. RBI policy, bond-yield moves, credit growth prints and bank results are the index's calendar. Its implied volatility rises into those dates in a predictable pattern.
- A month-long chain. With no weekly, Bank Nifty's open interest accumulates across the whole month. The call and put walls on its chain are more stable than Nifty's weekly ones and shift mainly when the index moves through them.
- Relative value. Bank Nifty against Nifty, or against FinNifty, expresses a view on banks versus the market or versus non-bank financials.
Common mistakes
- Trading on the old weekly rhythm. Many strategies built around a Wednesday or Thursday weekly expiry no longer apply; the contract is monthly on Tuesday.
- Using Nifty's lot or strike gap. Bank Nifty is 30 units at 100-point strikes; a 100-point move is worth ₹3,000 per lot.
- Ignoring the top two banks' calendar. Their results and any regulatory news move the index more than the sector's own data.
- Treating a Bank Nifty wall like a Nifty wall. With a month to run, a 53,000 call wall is a level writers are prepared to defend for weeks, not a one-week bet.
- Forgetting rebalance flows. Cap re-applications and constituent changes are announced in advance and create predictable flows in the heavyweights.
Indian-market specifics
- SEBI's October 2024 circular allows one weekly-expiry index per exchange. NSE kept Nifty 50; Bank Nifty, FinNifty and Nifty Midcap Select became monthly. BSE kept Sensex weekly on Thursday and Bankex monthly.
- Lot sizes after the January 2026 revision: Nifty 65, Bank Nifty 30, FinNifty 60, Midcap Select 120, Sensex 20.
- Securities Transaction Tax from 1 April 2026 is 0.15% of the premium on the sell side and 0.15% of intrinsic value on exercise at expiry.
- Writers post SPAN plus exposure margin, which NSE recalculates through the day; margin on Bank Nifty is higher per lot than on Nifty because of its volatility.
FAQ
What is the Bank Nifty lot size?
30 units since January 2026, down from 35.
When does Bank Nifty expire?
Last Tuesday of the month, monthly only. The weekly contract ended in November 2024.
How many stocks are in Bank Nifty?
14 from 31 December 2025, with the largest capped at 20% and the top three at 19%, 14% and 10% at rebalance.
Why does Bank Nifty move more than Nifty?
Fourteen stocks in one sector, sharing the same rate and credit drivers, against fifty stocks across many sectors.
Bank Nifty option chain, max pain and PCR
The Bank Nifty pages show strike-wise open interest, PCR and max pain from the latest close for the current monthly expiry. In the app, Market Predictions and Smart Money cover Bank Nifty live through the session.
Related terms
- FinNifty
- Lot Size
- Expiry
- Banking sector page, the constituents' own option chains