buy or sell futures?

N

nathan

New Member
#1
#1
If this question is too basic please pardon me. I am a newbie.

Let us say if I have 250 XYZ shares bought at Rs.900.I want to hold it
for 2 months as there is a rumour of bonus.The 2 months future price
is 950 and I am happy with that price. But I fear the price of XYZ
might come down. Should I buy a futures contract or sell a futures
contract?
 
timepass

timepass

Moderator
#3
#3
Vector said:
If u are attempting arbitrage u sell the futures. Then at expiry u have to reverse the transaction ie . sell shares and buy back the futures.:)
Click to expand...
Good one.. bouncer for me though.. so checked investopedia

What Does Arbitrage Mean?
The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.
Click to expand...
Bouncer still, so will need to check more threads in traderji for arbitrage, very stimulating :fatigue:


:D :D
 
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