Tag Archives: stock futures

Derivatives Trading

REGULATORY FRAME WORK The trading of derivatives is governed by the provisions contained in the SC(R)A, the SEBI Act, the regulations framed the reunder and the rules and bye-laws of stock exchanges. In this chapter we look at the broad regulatory frame work for derivatives trading and the requirements to become a member and an authorized dealer of the Futures and Options segment and the position limits

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Stock Market Questions And Answers

QUESTIONS AND ANSWERS ON CHAPTER Q. In Futures Trading, the profits are received or losses or paid 1.     In the delivery month 2.      On daily settlement 3.      On the day of expiry of the contract 4.      On a weekly settlement basis. A. The correct AnswerNO.2. Q. Which of the following prices is used to compute MTM of a futures contract is case it is not traded on a given

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Stock Market Questions And Answers

QUESTIONS AND ANSWERS ON CHAPTER Q. The best buy order for a given futures contract is the order to buy the index at the H^hest Price Average of the highest and lowest price. Lowest price. None of the above. A. The best buy order for a given futures contract is the order to buy the index at the highest price whereas the best sell

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Stock Future Tips

CONTRACT SPECIFICATIONS FOR STOCK FUTURES: Trading day in stock futures commenced on the NSE from November, 2001. These contracts are cash settled on trading day basis. The expiration cycle for Stock Futures is the same as for index futures, index options and stock options. A new contract is introduced on the trading day following the expiry of the near month contract. DETAILED CONTRACT SPECIFICATIONS FOR

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Nse Option Market

CONTRACT SPECIFICATION FOR INDEX OPTIONS On NSEs Index Options market, contracts at different strikes, having one month, two month and three month expiry cycles are available for trading. There are typically one month, two month and three month options, each with minimum seven different strikes available for trading. Hence at a given point in time there are minimum 3 x 7 x 2 or

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Trading Futures And Nifty Futures

DETAILED CONTRACT SPECIFICATIONS FOR INDEX FUTURES TRADING ON THE NSEl-S&P CNX NIFTY FUTURES Underlying Index : S&PCNX Nifty. Exchange of Trading : National Stock Exchange of India Limited. Security Descriptor : NFUTIDX NIFTY. Contract Size : Permitted lot size shall be 100 Price Steps : Re.0.05. Price Bands : Not Applicable. Trading Cycle : The futures contracts will have a maximum of three month

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Bearish Security

SPECULATION, BEARISH SECURITY, SELL FUTURES Stock futures can be used by a speculator who believes that a particular security is over valued and is likely to see a fall in price. How can he trade based on his opinion ? In the absence of a deferral product, there wasn’t much he could do to profit from his opinion. Today all he needs to do

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Effective Risk Management

PRICING FUTURES Pricing of futures contract is very simple. Using the cost of carry logic, we calculate fhe fair value of a futures contract. Every time the the observed price deviates from the fair value, arbitragers would enter into trades to capture the arbitrage profit. This in turn would push the futures price back to its fair value. APPLICATION OF FUTURES We look here

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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

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Trading Mechanism

The futures and options trading system of NSE. called NEAT F&O trading system, provides a fully automated screen based trading for Nifty futures and options and stock futures and options on a nation wide basis and an online monitoring and surveillance mechanism. It supports an anonymous order driven market which provides complete transparency of trading operations and operates on strict price-time priority. It is

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