Tag Archives: NSE

RSI – Relative Strength Indicator

  RSI – Relative Strength Indicator Developed by J. Welles Wilder and introduced in his book, New Concepts in Technical Trading Systems, the Relative Strength Index (RSI) is an extremely popular momentum oscillator. The RSI compares the magnitude of a stock’s recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It

Learn more


Types of Margins

TYPES OF MARGINS The Margin system for Futures and Options segment of NSE is explained below: INITIALMARGIN: Initial margin in Futures and Options segment is computed by NSCCL upto client level for open positions of CMs/Tms. These are required to be paid upfront on gross basis at individual client level for client positions and on net basis for proprietary positions. NSCCL collects initial margin for

Learn more


Option Trading Exercise

EXERCISE SETTLEMENT Although most option buyers and sellers close out their options positions by an offsetting closing transaction, an understanding of exercise can help an option buyer determine whether exercise might be more advantageous than an offsetting sale of the option. There is always a possibility of the option seller being assigned an exercise in  stock market. Once an exercise of an option has

Learn more


National Securities Clearing

CLEARING AND SETTLEMENT National Securities Clearing Corporation Limited (NSCCL) undertakes clearing and settlement of all trades executed on the Futures and Options Segment of the NSE. It also acts as legal counter party to all trades on the Futures and Options segment and guarantees their financial settlement. CLEARING ENTITIES Clearing and Settlement activities in the F&O segment are undertaken by NSCCL with the help

Learn more


Index Futures

FUTURES AND OPTIONS MARKET INSTRUMENTS The Futures and Options segment of NSE provides trading facilities for the following derivative instruments. INDEX BASED FUTURES INDEX BASED OPTIONS INDIVIDUAL STOCK OPTIONS 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

Learn more


The Trading System

ENTITIES IN THE TRADING SYSTEM There are four entities in the trading system. Trading Members, Clearing Members, Professional Clearing Members and Participants. 1. TRADING MEMBERS: Trading Members are members of NSE. They can trade either on their own account or on behalf of their clients including participants. The exchange assigns a trading members ID., to each trading member. Each trading member can have more

Learn more


Option Trading System

TRADING FUTURES AND  OPTION TRADING SYSTEM In this chapter we shall take a brief look at the trading system for nse india futures and options market. However, the best way to get a feel of the trading system is to actual ly watch the screen and observe trading The futures and options trading system of NSE Called NEAT-F&O trading system, provides a fully automated screen-based trading

Learn more


Single Stock Futures

APPLICATIONS OF FUTURES AND OPTIONS The phenomenal growth of financial derivatives across the world is attributed the fulfilment of needs of hedgers, speculators and arbitraguers by these products. In this chapter we first look at how trading futures differs from trading the underlying spot. We then look at the payoff of these contracts, and finally at how these contracts can be used by various entities in

Learn more


Introduction To Options

INTRODUCTION TO OPTIONS In this section, we look at the next derivative product to be traded on the -NSE, namely Options. Options are fundamentally different from forward and futures contracts. An option gives the holder of the option the right to do something. The holder does not have to exercise this right. In contrast, in a forward or futures contract, the two parties have

Learn more


Futures Terminology

FUTURES TERMINOLOGY SPOT PRICE: The price at which an asset trades in the spot market. FUTURES PRICE: The price at which the futures contract trades in the futures market. CONTRACT CYCLE: The period over which a contract trades. The index futures contracts on the NSE have one month, two months and three months expiry cycles which expire on the last Thursday of the month.

Learn more