16. What are the Risks associated with trading in Derivatives?
Investors must understand that investment in derivatives has an element of risk and is generally not an appropriate avenue for someone of limited resources/ limited investment and / or trading experience and low risk tolerance. An investor should therefore carefully consider whether such trading [...]

Have a view on the market?

Example A.
On 01 March an investor feels the market will rise
– Buys 1 contract of March ABC Ltd. Futures at Rs. 260
(market lot : 300)
09 March
– ABC Ltd. Futures price has risen to Rs. 280
– Sells off the position at Rs. 280. Makes a profit of
Rs.6000 [...]

(Contd of Derivative Trading II )

12. What is the contract cycle for Equity based products in NSE ?
Futures and Options contracts have a maximum of 3-month trading cycle – the near month (one), the next month (two) and the far month (three), except for the [...]

( Contd of Derivatives Trading I )

6. What are various types of derivative instruments traded at NSE?
There are two types of derivatives instruments traded on NSE; namely
Futures and Options :
Futures : A futures contract is an agreement between two parties to buy or sell an [...]

FAQ’s

1. What are derivatives?
Derivatives, such as futures or options, are financial contracts which derive their value from a spot price, which is called the “underlying”. For example, wheat farmers may wish to enter into a contract to sell their harvest at a future date to eliminate the risk of a [...]