Help with basic of market

Hi All,

This forum is excellent. :thumb:

Thank you all. :clapping:

Since I am venturing out into F&O, I have few basic queries.
Appreciate if some one will answer.

Thanks in advance. :clapping:

NSE / BSE Futures and Options -

1. What is the last day / time up to which the contract can be traded ?
2. Is there a notification / time period after which delivery / receipt of shares is mandatory ?
3. If you let the contract expire, is there any difference in charges / taxation compared to squaring up before expiration ?
4. How do treat Index contracts and what is to be delivered / received ?
5. What is the minium unit of price and where to find the contract size / Margin required etc. for all types of contracts ?
6. So far I have understood that NIFTY index has a lot size of 50 and minimum unit of price is 5 paisa. Hence when price
increases by 5 paise the profit / loss is 0.05*50 = INR 2.5
Where and how to calculate similarly for other contracts of NSE / BSE ?

MCX Futures -

1. What is the last day / time up to which the contract can be traded ?
2. Is there a notification / time period after which delivery / receipt of commodity is mandatory ?
3. If you let the contract expire, is there any difference in charges / taxation compared to squaring up before expiration ?
4. Are there Index contracts for MCX and what is to be delivered / received ?
5. What is the minium unit of price and where to find the contract size / Margin required etc. for all types of contracts ?
6. So far I have understood that CRUDE OIL has a lot size of 100 and minimum unit of price is 1 rupee. Hence when price
increases by 1 rupee the profit / loss is 1*100 = INR 100
Where and how to calculate similarly for other contracts of MCX ?

Rgds,
M R Phadnis

Welcome to TJ ... Answers in blue. I don't have idea about MCX but my guess is that it should be the same.

1. What is the last day / time up to which the contract can be traded ?

All the monthly contracts expire on last Thursday of the month. So the March contract expired yesterday and april will expire on 24th Apr.

I take it that they can also be traded till the last day and the last minute. Is this correct ?

2. Is there a notification / time period after which delivery / receipt of shares is mandatory ?

F&O are not shares they are derivatives so there is no delivery concept. If you buy on MIS (for the day), you can utlize margin provided by your broker but needs to be sqauired off before EOD. If you buy NRML order, you would need to pay the total margin amount and you can continue to hold it till expiry

I understand that in Derivatives (Futures and Options at NSE / BSE) there is no delivery of shares. The contracts are settled in cash.

3. If you let the contract expire, is there any difference in charges / taxation compared to squaring up before expiration ?

I think there are some STT and taxes you have to pay.

Please, will you provide the details ?

4. How do treat Index contracts and what is to be delivered / received ?

Treated same as stock futures. Index contracts are also traded in lots.

Thanks. Got it. Index contracts and Stock contracts are same.

5. What is the minium unit of price and where to find the contract size / Margin required etc. for all types of contracts ?

Different scripts have diff lots sizes. Here is the info link http://www.nseindia.com/content/fo/fo_mktlots.htm

Thanks for the link. The link gives lot sizes, but it does not say anything about the margin required. Please provide link to margin required, if possible.

I take that minimum price by which the contracts (both Index and Stock) can be traded is 5 paisa and not 1 paisa. Is this correct ?

6. So far I have understood that NIFTY index has a lot size of 50 and minimum unit of price is 5 paisa. Hence when price
increases by 5 paise the profit / loss is 0.05*50 = INR 2.5
Where and how to calculate similarly for other contracts of NSE / BSE ?

If the lot size is 50, you will be able to trade only in the multiples of 50. So for example, NF lot size is 50 that means min quantity you can trade is 50 only and further in the multiples of 50. Check out the link for lot size.

Thanks, got it. The contracts are traded in lot sizes. The minimum price change is 5 paisa. Is this correct ?

Thanks again.

Awaiting confirmed information regarding MCX.

Rgds,
R M Phadnis