QUICK REFERENCE GLOSSARY ON FUTURES AND OPTIONS 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…
CLEARING MECHANISM The clearing Mechanism essentially involves working out open positions and obligations of clearing (Self clearing/trading-cum-clearing/professional clearing) members. This position is considered for exposure and daily margin purposes. The open positions of CMs are arrived at by aggregating the…
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 ?…