How to invest in banknifty

As we know banknifty is the index of the bank, this index consists of the 10 public and private sector bank.

We cannot buy the index directly but still there are ways to trade and invest in banknifty. If you want to trade in banknifty you can do it by trading in its option or future , the price of future of banknifty is very similar to the banknifty price and the movement in price of the banknifty is very similar to the banknifty future price, one can trade in any of the 3 series available that is current , next and the far series.

Similarly one can trade in the options for the same. Banknifty has weekly expiry options too , so it can also be used to trade.

But if you are a long term investor and want to invest in the banknifty for a long time still then there are few ways available , let us discuss them one by one.

1. Banknifty etf :- Yes, in order to invest in the bank nifty one can buy the banknifty etf , there are many etf's available for the banknifty. I prefer to buy the SBI Banknifty etf for the same purpose. The banknifty etf has the same proportion of the shares that the nifty have and it is a passivly managed fund which tracks exactly the price of the banknifty. It is one of the best way to invest in the banknifty.

2. SmallCase:- you can create your own basket just like the banknifty from the smallcase. You can create a smallcase with the similar proportion of the bank stocks and it will be quite similar to the banknifty.

3. By purchasing the individual stocks in the right proportion :- As many brokers still do not support the smallcase yet , one can still buy the banks stocks in the right proportion. This can be little tricky to invest as buying and selling of the 10 stocks at the same time is not easy.

My favorite option is the banknifty etf's as it is very simple to invest in this way and these can be purchased and sold very easily in the market. I have even made the investment in the same and like to trade it.

These are  the ways that I know as of now, there may be other ways too. I hope enjoyed the post and you too invest in the banknifty with this way. Let me know which method do you guys prefer for investments.