What is Futures trading in Stock Market?
Thinking to start trading in share markets and heard Futures to be best for profits.
How does futures derivitives work in Stock Market?
National Stock Exchange or Bombay Stock exchange, which one to choose?
How to start Future trading? What is a lot? How much loss one can face in Futures trading?
Valuation of Future derivitives are affected by price of shares?
Futures are the contract that one enter with another party to buy or sell the specified shares at agreed rate on a agreed date.
For example, you Enter a contract with x to sale 1000 shares of Infosys on next month same date at a price of 2000 per share.
This is a future contract, if the price of shares on that date are less than 2000 you make the profit and if the price is more on that then you make loss.
Suppose price on the date of execution of contract is RS. 1750 per share, you can buy shares at 1750 and sale at 2000 to X. You make a profit of 250 for each share.
Most of the future contracts are placed at National Stock Exchange.
Future trading in stock market can be started by opening a Demat Account with any broker or sub-broker.
Yes valuation of future contracts is affected by share price.