Index Futures

FUTURES AND OPTIONS MARKET INSTRUMENTS

The Futures and Options segment of NSE provides trading facilities for the following derivative instruments.

  1. INDEX BASED FUTURES
  2. INDEX BASED OPTIONS
  3. INDIVIDUAL STOCK OPTIONS
  4. INDIVIDUAL STOCK FUTURES

CONTRACT SPECIFICATIONS FOR INDEX FUTURES

NSE trades Nifty, CNX IT, and Bank Nifty futures contracts having one month, two month and three month expiry cycles. All contracts expire on the last Thursday ofevery month. Thus a January expiration contract would expire on the last Thursday of January and a February expiry contract would cease trading on the last Thursday of February. On the Friday following the last Thursday, a new contract having a three month expiry would be introduced for trading. Thus, at any point of time, three contracts would be available for trading with the first contract expiring on the last Thursday of that month. Depending on the time period for which you want to take an exposure in index futures contracts, you can place buy and sell orders in the respective contracts. The Instrument type refers to “Futures Contract on Index” and contract symbol – NIFTY denotes a “Futures contract on Nifty Index” and the expiry date represents the last date on which the contract will be available for trading. Each futures contract has a separate limit order Bock. All the passive orders are stacked in the system in terms of price time priority and trades take place at the passive order price (similar to the existing capital market trading system). The best buy order for a given futures contract will be the order to buy the index at the highest index level where as the best sell order will be the order to sell the index at the lowest index level. Trading is for a minimum lot size of 100 units. Thus if the index level is around 2000, then the appropriate value of a single index futures contract would be Rs.2,00,000. The minimum tick size for an index future contract is 0.05 units. Thus the single move in the index value would imply a resultant gain or loss of Rs.5.00(i.e., 0.05 x 100 units) on an open position of 100 units.

 

Learn option trading course  from expert – Click Here

 

www.Moneymantrastock.com

call @ 099289-77488

 

Leave a Reply

You must be logged in to post a comment.