@sanjosedesi and SavantGarde,
Firstly, thanks to both of you so very much for the replies. Cleared many of my doubts.
Sorry, SavantGarde, for making you type.
So in short, if I don't have enough ledger balance to cover the losses at the end of a trading day, it will be squared off... but never otherwise.
To recap, I got the answer to Doubt No. 1. They can even sell your holdings to get back the money.
Answer to Doubt No. 2 is that indeed someone
HAS to buy a Futures contract of the company for me to sell it.
To Doubt No. 3 is that yes I can sell Futures contract at any second after it's purchase till expiry date.
To No. 4, Yes I can "roll over".
These might be somewhat stupid questions,
But in general, the stocks are just as Liquid if not more Liquid as it is in the Equity market(different for each stock, obviously)? I won't have to wait to sell a contract?
And the part about Income Tax, how do I know the difference between my Futures earnings and Equity earnings to know which will incur higher tax or lower tax?
When you said:
If you look at the trading volumes, generally the current month is most active, the next month is half as active (just in the manner of speaking) and the 3rd month is barely active so people usually roll over to the next month.
I didn't fully understand. The month I buy the contract is what you've called "current month", right? How is that month more active than subsequent months? Won't there be people buying new Futures contracts the next months as well? Or are there some fixed 3 months when it's best to buy Futures contracts?