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Why and How to Trade in NIFTY Futures

Hello friends, are you having any kind of problem about NIFTY then i am here to solve your problems related to the topic of share market in this blog we are going to study in a brief about Nifty Futures and why and how to trade in Nifty Futures. Let's start our topic by knowing in a brief about Nifty Futures.<br>

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Why and How to Trade in NIFTY Futures

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  1. Why and How to Trade in NIFTYFutures Hello friends, are you having any kind of problem about NIFTY then i am here to solve your problems related to the topic of share market in this blog we are going to study in a brief about Nifty Futuresand why and how to trade in Nifty Futures. Let's start our topic by knowing in a brief about NiftyFutures. About Niftyfutures It is basically some index futures where the underlying is the S&P CNX Nifty index. In a country like India, index futures trading started in 2000 on the National StockExchange. Nifty futures has contracts of 50 stocks, Nifty futures contracts have a three- month trading cycle also and those are , the near month, the next month and the farmonth. When the near month contract expired, a new contract of a three month duration is introduced on the next trading day. Investors can easily trade in Nifty futures by having a minimum amount in their account. The minimum amount should be a percentage of the contractvalue.

  2. Why we should trade in NiftyFutures? Here are some of the main things that i am going to tell about which gives advantages in trading in NiftyFutures. Short stock, long indexfutures Sometimes when you sell your stock, but the market is upside at that time, thus in result you have to face lost potential profits. Index futures help you to reduce this risk. By buying index futures when you are lack of the stock, you can reduce the amount to minimum of potential profitslost. Equity portfolio, short indexfutures. Few times when you own a portfolio and feeling uncomfortable about the condition of market. You can decrease the risk by selling index futures. The concept based on the fact that each portfolio has their index exposure and so risks are accounted for by unstable in theindex. Long Stock, Short IndexFutures Suppose you have 500 shares of Reliance Industries at the price of Rs 1,000 per share, Nifty is at 5,000 and Nifty futures is at5,020. To save your Rs 5 lakh (Rs 5,00,000) position from the market downturn, you will have to sell your 100 Nifty futures. Suppose on the date of expiry, the Nifty Futures is at 4,750 (fall of 5 percent). When both the position will close, you will earn Rs2,000.

  3. Short Stock, Long Index Futures Suppose you are facing the lack of 400 shares of Infosys Technologies at a price of Rs 2,500 for each share, Nifty is at 5,000 and Nifty futures is at5,050. To save your money Rs 10 lakh (Rs 1 million) position from the downturn of market, you will have to buy about 200 Nifty futures. If, on the date expiry, Nifty futures is at 5,250 (Rise of 5 percent), When both the position will close you don't have to face any kind ofloss. These are some of the basic and necessary things you should know about Nifty and Nifty futures if you are newly entering into themarket. I hope, my above mentioned things will help you a lot to understand about Nifty and Niftyfutures.

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