I request seniors advise on the following:
1. What kinds of stocks participate in futures?
I see that large caps are present, and some midcaps also are present.
Are there any small caps too?
2. Regarding gains in futures:
I came to following formula on futures.
[Gains/losses in futures of large caps = gains/losses in mid caps(cash) and smallcaps(cash) ] as the amount of cash involved is same.
For example:
1. Lets say we are using 1 lac cash.
2. We can buy 1 lot of large cap stock future at 2.5 times leverage.
3. This large cap moves 4% in a given expiry period. The gain would be 10%
4. Now we bought a midcap with 1 lac in cash (no leverage).
5. The mid cap moves 10% and we booked profit. It is my experience Madcaps generally give 10% in month if all technical indicators support. If we can not find such a midcap we better sit in cash.
So, I have come to above conclusion.
1. What kinds of stocks participate in futures?
I see that large caps are present, and some midcaps also are present.
Are there any small caps too?
2. Regarding gains in futures:
I came to following formula on futures.
[Gains/losses in futures of large caps = gains/losses in mid caps(cash) and smallcaps(cash) ] as the amount of cash involved is same.
For example:
1. Lets say we are using 1 lac cash.
2. We can buy 1 lot of large cap stock future at 2.5 times leverage.
3. This large cap moves 4% in a given expiry period. The gain would be 10%
4. Now we bought a midcap with 1 lac in cash (no leverage).
5. The mid cap moves 10% and we booked profit. It is my experience Madcaps generally give 10% in month if all technical indicators support. If we can not find such a midcap we better sit in cash.
So, I have come to above conclusion.