T he other day a friend told me that she made a killing trading in Stock Futures. In Futures, you buy a contract which will have a specific lot size depending on the stock. Let's say you want to buy an Infosys Futures contract. This will comprise shares.

About Futures Trading in India

Or, you want to buy a HPCL Futures contract. This will be a lot of shares. In Futures, you buy a lot. The lot size is set for each futures contract and it differs from stock to stock. When you buy a Futures contract, you don't pay the entire value of the contract but just the margin.

This margin amount too is prescribed by the exchange. And the price of each HPCL share is Rs This will amount to Rs 2,02, Rs x shares. You don't pay the entire amount of Rs 2,02, The margin depends on what the exchange sets for the day. Based on certain parameters, it declares the margin for each stock.

So you end up just paying just Rs 30, not Rs 2,02, You purchased a HPCL Futures contract and the underlying price is Rs per share. Let's say, the next day it moves to Rs The following day, it dips to Rs This will go on till you sell the Futures contract or it expires last Thursday of the month.

PHEENIX::SELL

When you buy in the cash segment where investors buy and sell any number of shares and hold them in demat accountsthe shares are delivered to you and sent to your demat account. Over here, there is no delivery so you do kingsville livestock auction market report need a demat account.

The brokerage in Futures is much lower. It will be around 0. These are the rates given to regular investors. An occasional investor may end up paying up to 0. In the cash segment, the brokerage will be around 0. When you buy shares in the cash segment, you have to make the entire payment to your broker.

Let's say you buy HPCL shares for Rs per share. You end up paying Rs 2,02, Within two days, you will have to make the full payment to your broker. When you sell shares without owning them, it is known as short selling.

About Futures Trading in India

You would do so if you believe that the price of the stock is going to drop. With Futures, you do not have to square your transaction at the end of the day. You can square the futures traded india whenever you want or wait till it expires on the last Thursday of the month.

It is worth noting that the best online broker for shorting stocks of the shares in the cash segment is mostly lower than the Futures price.

So, if it is available for Rs in the Futures segment, you should get it for Rs in the cash segment. Though, on occasions it may even be slightly higher. In the cash segment, you can pick up however many shares you want starting from just one share. If you want to buy more you can, but they must be in multiples of the lot. So, you can buy one or two contracts. If you are an investor who wants to buy shares and hold on to it, you should invest in the cash segment. And, you buy shares in the cash segment.

You end up paying Rs 2,70, The price dips to Rs 2, If you sell the shares at this rate, you make a loss of Now let's say you purchase an Infosys Futures at the underlying share price being the same. Since you invested only Rs 54, you have incurred a loss of To check the list of stocks available for trading, go onto the National Stock Exchange website. Why the bull run could turn in Stock picking is an art, not a science.

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Why trade the futures markets in India?

Hello sir, I am very much intersted in learning derivatives andhow to trade them. I have read all the articles that are publishing in the rediff Posted by Basanagouda Y.

Options Are options on stocks not commonly traded in India? Thankyou The article explains futures very well. Thank you for this very informative article. Posted by Nemish Dalal. Mutual Funds Quite educative Posted by G.

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