Basics of future trading

Hello Friends and experts. I have created this thread to learn the future trading, discuss about it and if you have any questions regarding the same, you can post them here.
I request all the experts - traderji, AW10, smart trade, etc to join this and help us.

I myself wld like to start this post.

I hav a question, like whn u buy options contract , u pay a premium.
while buying a futures contract, what is the cost of it? i searched nse india but i didnt saw any premium values, so does it means that we need to pay whole price as for example let nifty spot be 4500 and nifty aug future be 4520. if i want to buy nifty aug future, wht price i hav to pay? and what is the minimum number of lots i will hav to buy?


Thanks in advance

Min number of trade qty is one contract of future. One nifty future contract size is 50.
Your transaction cost will be 4520 * 50 = 226000 rs... but u don't have to pay the full money.
Your broker will ask for just the margin money which is 15 to 20% (depends on broker and your trading relationship with them.). So approx 30k to 35k will be blocked from your account balance.

You can find out a lot of basic info about F&O trading from help section of your broker's site. You can also refer to NSE site and education/certification section there has nice study material addressing most of the basic questions.

Happy Trading

There is no premium to be paid/received in futures...futures contract has margins which are to be paid by buyers and sellers both as both carry the market risk.

In nifty you have to pay initial margin and volatility margin,which comes to between 12 -15 % of the contract value....

Nifty future has a lot size of 50 and mini nifty has a lot size of 20.....

So if nifty fut is at 4520,the margin payable is (4520x50)x0.15

Best wishes,

Smart_trade

Thankyou AW10 and smart trade for your valuable answers.
I hav a question that i red somwhere , tht minimum contract size to start trade in futures is of 2 lacs Rs. and 1 lot bse = 50 and nifty is 200.

I tried to get tht article and i searched nse india but now i dont knw where it went!

experts, plz explain me about this.


Thanks in advance

brokerage will be on the whole money or just the money which is blocked?

Brokerage is "per lot"

say you buy a nifty future at 4500 and the brokerage is 0.03% then you will pay

4500*0.0003 = approx Rs. 1.5 (as it include service tax, turnover tax and what not)

same will be calculated at the time of selling... just that STT will be added when selling.. usually its approx Rs. 4 breakeven when 0.03% is the brokerage.

Attached is the excel sheet which can do the calculation for you and tell you the correct breakeven. You can use this to calculate how much brokerage you are paying and at what price if you sell then you will actually make some profits...

findvikas - Thank you for the excel sheet provided!

No problem... please download the file again, I later realized that there was a small correction that was needed. Sorry about that.

Hi friends. plz expalin me about this which i saw on nse india.

Trading Parameters
Contract size
The value of the futures contracts on Nifty may not be less than Rs. 2 lakhs at the time of introduction. The permitted lot size for futures contracts & options contracts shall be the same for a given underlying or such lot size as may be stipulated by the Exchange from time to time.

plz expalin wht does this means.




Thanks in advance.