I am trading in future stocks and i am having difficulty selecting stocks because of leverage. I dont know whether i can explain it properly but i will try my best.
I have an account of 60000 and want to select a fututre stock. example if i select MRF stock( ~35000rs) a slight change in percentage whether gain or loss (eg0.05) have a big impact on my account (very high gain or loss). This can cause a big loss or a big gain. whereelse if i select UCO bank (~30rs) the impact (especially loss) is less. as a risk averse person i would ordinary avoid MRF futures when considering my total investment (60K).
Is there any simple calculation using which we can calculate a futures stocks "Impact", say a change in 1% causes this much gain/loss
eg MRF 1 lot (1%change)= +/-10000rs
UCO Bank 1 lot (1%change)=+/- 200 rs
I have an account of 60000 and want to select a fututre stock. example if i select MRF stock( ~35000rs) a slight change in percentage whether gain or loss (eg0.05) have a big impact on my account (very high gain or loss). This can cause a big loss or a big gain. whereelse if i select UCO bank (~30rs) the impact (especially loss) is less. as a risk averse person i would ordinary avoid MRF futures when considering my total investment (60K).
Is there any simple calculation using which we can calculate a futures stocks "Impact", say a change in 1% causes this much gain/loss
eg MRF 1 lot (1%change)= +/-10000rs
UCO Bank 1 lot (1%change)=+/- 200 rs