http://www.daytradingshares.com/futures_options_derivatives_trading.html
http://stdwww.iimahd.ernet.in/beta/nuke/html/uploads/DerivBasics.pdf <- a bit old one but useful for learning purpose. read this one and understand the terminologies.
http://beyond-basics.blogspot.com/2008/01/beyond-equity-trading-derivative-basics.html
Friend, start with futures trading with MINIFTY futures.
A futures contract is a contract of underlying (shares/index) which will be traded on last thursday of the contract, read ahead and you'll understand.
A. Size - Futures trades with fixed contract-size or lot-size, in the case of minifty index futures (futidx), it is 20 units. and for stocks like bhel is 75 (futstk=stock futures). better learn the basics with minifty and later move to stock futures.
B. Money - you'd need about 10-30 percent margin on total contract value. so, MINIFTY has 20 units, and current nifty value is 3950 (20*3950=79000) to hold 79000 rupees of contract you need to have 20% of the contract value, 79000*10%=7900. so, 1 minifty lot comes at 7900 which is called the margin.
Now, coming to the Margin, margins are of 2 types:
1. span margin - 10% of total contract value
2. gross margin - 3% gross margin (when the prices go up or down, this 3% is used as insurance)
3. total margin required to buy 1 lot of minifty is = span+gross = approx. 10400.
C. Time - futures contracts are of three types, and
- Near Month Contract -> current running month to last thursday of current month. example, this month is october, so 1m or near futures contract will expire on 30-october-2008
- Next Month Contract-> Next month contract which is also represented as minifty-2m or minifty-nov27 (the last day of expiry is last thursday of the contract month)
- Far Month Contract -> is the 3rd month contract which will be dec25 or dec24 (one day previous to a holiday) and we cannot buy/sell any 3rd month contract.
D. Profit/Loss: suppose you "go long" on 1 lot of minifty (you bought 1 minifty lot) and the price moves into profit, with each point rise you gain 20rs. And if you are "short on" minifty, then each point fall gives you 20rs. one point move against your position gives 20rs loss.
E. Brokerage: The borkerage for futures is very less. you'd require to pay 0.03% to 0.05% for each buy/sell transaction. which comes to 3-5 points profit will go to broker and above that the profit is all yours.
F. Rollovers: if you are holding this month contract and want to continue in the next month, you'll sell this month's futures contract and buy the next month's contract.
good luck