Hi,
Back with another noob query. I've never traded in Futures so let me provide this boring forum with some comic relief.
Lets say, Nifty futures is at 6000. Going by noob math I would need 3,00,000 (50 * 6000) to buy one lot of Nifty Futures. Am I right?
Or
Read a post above that margin required is 11,000 for intraday and 30,000 to hold it overnight. This has left me quite confused. Reason why I stayed away from Futures was because of the high margin requirement and stuck to options thus far.
So, lets say, I buy one lot of Nifty Futures at 6000 and exit at 6025, what would be my profit?
1) 25 points minus (brokerage + normal charges)
or
2) 25 points minus (brokerage + normal charges + charges for providing intraday margin charged by you)?
Futures are leveraged products, so when you are buying for 3lks of nifty you are putting up only Rs 30,000.
The reason people trade futures is because you get to leverage without any cost. So even though you are buying something worth 3lks with 30k in your account, you don't have to pay anyone interest for the remaining 2.7lks...
So if you buy at 6000 and sell at 6025, you will make a profit of 25 points, multiply it by 50(1lot of nifty) and you have a profit of Rs 1250.
In any business there is a cost of running business and there are various people who make money of your business, in the stock markets you have the :
1. Brokers... Brokerage
2. NSE: you trade on NSE, so they would want to make some money of you...
3. Central Govt: Security transaction tax.
4. State govt: Stamp duty
5. regulator: SEBI charges
Breakeven can vary between 1.6 points to 14 points depending on which broker you trade with... If you do only 1 lot with us, the breakeven is around 2.5 points and with increase in trading size will bring it down to 1.6points..
Hope this helps...
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Cheers..