This section is very useful to trade in future
- : The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market, in which delivery is due at a later date
- : Derivatives are financial contracts whose value is linked to the value of an underlying asset. ... They are complex financial instruments that are used for various purposes, including hedging. Hedging provides a sort of insurance cover to protect against losses from an investment.
- : Margin : A margin is collateral that the holder of a financial instrument hs to deposit to cover some or all of the the credit risk of their counter party ( broker/exchange) MTM : It is the abbreviation of Marked to Market. The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day. Premium : It is money paid by the option buyer to buy either call/put option. The seller of the option contract collects the premium to sell the rights to the buyer of the call/put option. Strike Price : The strike price is defined as the price at which the holder of an option contract can buy (call option) or sell (Put option) of the underlying asset when the option is exercised. Expiry Date : It is the last day that an options or future contract
- : The future contract provides rights to buyer(Rights to Buy) and Seller(Rights to Sell) at the agreed price. ... In Option contract ,the performance of deal depends on the buyer party ,but in Future contract,both the buyer and seller have rights and any one can order the exchange to perform.
- : In call option an put option only sellers signature will be there and the premium is fixed by him and buyer may/may not perform the contract on the expiry date . In Call option,Buyer gets Right to buy and in Put option,Buyer gets Right to sell
- : In finance, a futures contract is a standardized forward contract, a legal agreement to buy or sell something at a predetermined price at a specified time in the future, between parties not known to each other
- : Futures/ call/put are required for traders to customize the trading. In the derivative market, the entire stock price is not required and only margin needs to be paid. ... Here, the percentage of Profit/Loss is much higher compared to Equity market.
- : It can't be bought as individual stock, however it can be bought in other segment of trading know as FUTURE & OPTIONS. ... So you have two choices now, you can either buy nifty options or nifty future. NIFTY FUTURE-There are 2 Key difference between buying any stock in cash segment or in future.
- : In case of physical delivery, the holder of the contract will either have to take the commodity from the exchange or produce the commodity. However, cash settlement does not involve any delivery of asset, but just net cash is settled on contract expiration.