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…
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…
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.…
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…
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…
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…
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 ?…
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…
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…
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…