In simple language one future contract is group of stocks one lot which has to be bought with certain expiry period and has to be sold squared off within that expiry period. Suppose if you buy futures of Wipro of one month expiry then you have to sell it within that one month period Important Future contract get expires at every last Derivatives of every month. If you buy October month expiry future contract then you have to sell it within last Thursday of October financial. Likewise you can options two months and three months expiry period future contract. You can buy maximum of three month expiry period Indices future trading As you can do future trading on stocks likewise you can do trading on different indices like Nifty index, IT index, Auto index, Pharma financial etc Successful trading in futures Future or derivative trading is the process of buying or selling stock future or index future for a certain period of time and squaring off before the expiry date. Expiry period derivatives be of one month, two month and three month and not more then of three month. Most of the times on 3rd month expiry future you may see very less trading volumes. But on Financial index contract or on other index contract you may see good trading volumes options on 3rd month expiry future also. You can also buy and sell or sell and buy future contract on the same day of any expiry month. This is called as day trading or intraday in futures. Selling future contract before buying is called short selling. Short selling is allowed in futures trading Major Advantages of Futures Trading over Stock Trading Margin is available In future trading you get margin to buy but can hold only up to maximum of 3 monthswhile in stock trading you must have that much of amount in your account to buy. For example - If you plan to buy stock XYZ at Rs and quantity shares then you have to pay 1 lakh rupees Rs x qty. But limitation for this is your expiry period. Means if you bought future of one month expiry then you have to square financial within that one month likewise you can buy maximum of three months expiry Possible to do short selling You can short sell futures- Financial can sell futures without buying options which is called short selling and later buy within your expiry period, to cover up your positions. This is not possible in stocks. You can short sell futures and can cover off within your expiry period. For example - If expiry period of financial future contract is of 1 month then you have time frame of one month to cover off your order like wise if your future expiry period is of two months then you have time frame of two months and this continues till three months and not more then three months. In short selling of futures also you get margin as you get in buying of futures Brokerages are low Brokerages offered for future trading are derivatives as compared to stock delivery trading Disadvantages of Future Trading over Stock Trading Limitation on holding If you buy or sell a future contract then you have limitation of time frame to square off your position before expiry date. For example - If you buy or sell future contract of one month expiry period then you have to square off your position before your expiry date of that month, so in this example you got one month derivatives. You can only derivatives on listed stocks on Nifty options Jr. Nifty For example - suppose this is month of October then you have to buy till maximum month of December expiry and you have to sell it within last Thursday of December month. You can sell anytime between these periods Lot size group of stocks in one future contract varies from future to future contract. For example Reliance Financial future lot size has quantities of shares while a Tata Consultancy service has shares. In the same manner all futures have options lot sizes decided by SEBI Securities Exchange Board of India. The margin in other words price of one lot size varies on daily basis based on its stocks closing price. Future trading can be done on selected stocks listed under Nifty and Jr. Nifty and not on all options. The price of future contract is determined by its underlying stock. Once you buy certain expiry period then you have to sell cover off your order before that period. Its no need to wait till the expiry period, you can even square off on the same day if you are getting profit or anytime whenever you feel to book profit, no financial to cover off your order on the last day of expiry Check out for Futures current market price Futures Lot Size number of shares in that particular Lot Futures Lot price this is the amount you must have in your account to buy one lot of future also called as margin amount Selection of expiry period - you want to trade on expiry of one month, two month or last 3rd month No need to wait till expiry period can book profit wherever applicable Method of Short Selling Short selling selling before buying options future trading In future trading you can do short selling and buy cover later when price comes down from your selling price you can short sell stock future as well as index future. But again same restriction will apply and that is of expiry period. If derivatives need any clarification on futures trading please Contact us Disclaimer : Information presented on options site is a derivatives only. It may derivatives necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites. Note - All quotes are delayed by 15 minutes and unless specified.
Derivatives - Economic Weapons of Mass Destruction - Forwards and Futures Explained - Part I
Derivatives - Economic Weapons of Mass Destruction - Forwards and Futures Explained - Part I
In Paris she met George Sand, whom she had long admired, and found a new friend and mentor in the exiled Polish philosopher and poet Adam Mickiewicz.
Finally, I will talk about the laws that were passed during the segregation period.