PLEASE HELP-NEW TO Futures & Options

[loosingstreak]

can anebody explain what exactly is leverage with an example......how futures trading is done.........pls explain

Thats pretty simple. Take for eg the nifty the min. lot size being 50 you get to trade 1 lot for a margin of say 10% of nifty spot.
So if you put up a margin of about 20k you get a leverage of about 200000 for 1 contract.

Buying and selling precedure is pretty much same as stocks.

 

[caramel26]

hi
not sure whether this would be the correct place to ask these sort of question ?

Q1 > what is Futures & Options ?

Q2 > Can someone take Pain in explainig 1 example each (F & O) and explain how this work...?( if possible with 1 live example)

Q3> I hope i'am not asking too much for u punts?

Q4 > Minimum amt. req. to start trading in F & O?

thanks
sridhar

 

[mdraafi]

Visit the web http://tradersedgeindia.com/beginners_guide_futures.htm

 

[knarendra]

Dear sir,
I read in a book,a famous trader says about option,
Just buy call and buy puts, then count your profit.
What is the meaning?
Is it Arbitrage trading in Option?
Pl. explain me.

regards,
naren

 

[musicjunkie]

hi
not sure whether this would be the correct place to ask these sort of question ?

Q1 > what is Futures & Options ?

It is very complex to answer that but in one line they are derivative instruments which means their movement relies on the underliying. In simple terms the F&O market relies on the equity market for price direction. For now atleast stay away from options as they are decaying assests and are a bit more complex, our seniors can help you on that. The futures market basically gives you leverege, varies from stock but normally would be about 25% initial margin, so a 2% movement up will bring you a profit of 8% before brokerage.


[/QUOTE]
Q4 > Minimum amt. req. to start trading in F & O??[/QUOTE]

around 35,000 to 55,000

MusicJunkie

 

[vijbala]

Hello Caramel,
Trading in futures is easy and profitable. For example IFCI (lot size 7875) was trading at Rs56 on 2nd august and rose to 60 plus the next day. So a profit of Rs4 multiply 7875 equals Rs 31500 is the gross profit. Still need more explanation ? I can help

 

[thimma]

Hello Caramel,
Trading in futures is easy and profitable. For example IFCI (lot size 7875) was trading at Rs56 on 2nd august and rose to 60 plus the next day. So a profit of Rs4 multiply 7875 equals Rs 31500 is the gross profit. Still need more explanation ? I can help

Similarly on between 26 and 27 July2007 when the market tanked CAIRN slipped from 160 to 142. So for the lot size of 2500 the loss is 45000. Futures is a double edged sword be very carefull while trading.

 

[soody]

Dont get carried away by huge lot sizes like IFCI etc. These are fundamentally weak stocks being played by some market movers. U saw profit booking by these players even before the correction really started. There is a huge risk of these stocks going down just like IDBI did before. So go for funda large cap stocks like RIL,SBI,TISCO,RCOM etc in FNO!

 

[caramel26]

thanks mdraafi, for providing the useful link..i did read and got some basics..
thanks musicjunkie for u r kind input..
thanks vijbala and thimma for giving examples and explaing F & O
thanks soody for observation and guiding me..

thanks to u all ..initially never thought i would get reply to such stupid questions..but thanks to u guys

i still got lot's of question..
if some one can refer to some good websites where they teach F & O would be really great..

some times u have so many doubts it's not possible to ask them in forums..
can someone give their gmail or yahoo or msn id's where i can chat through them...and get explained through...


please help

thanks
sridhar

 

[vijbala]

ofcourse we have to decide the entry level. Now we can buy CAIRN at this price 142 for a target of 155