A:Futures contracts are one of the most common derivatives used to hedge risk. A futures contract is as an arrangement between two parties to buy or sell an asset at a particular time in the future for a particular price. The main reason that companies or corporations use future contracts is to offset their risk exposures and limit themselves from any fluctuations in price. The ultimate goal of an investor using futures contracts to hedge is to perfectly offset their risk.
In real life, however, this is often impossible and, therefore, individuals attempt to neutralize risk as much as possible instead. In the futures market, margin imoortant a definition distinct from its definition in the stock market, where margin is the use of borrowed money to purchase securities. This margin is referred to as good faith because it is this money that is used to ICICI Direct HDFC Sec ProStocks India Infoline Kotak Sec Sharekhan Axis Direct Ventura SBI Capital Zerodha Karvy Trade Smart SASOnline Aditya Birla Motilal Oswal Upstox Bajaj Capital Nirmal Bang IDBI Capital Angel Broking Indiabulls Reliance Sec Religare Geojit Anand Rathi Edelweiss.
But before considering trading as a career opportunity many things need to be taken care of. Now, just take a look at example. IfDear traders toady I will explain how to calculate your total tax paid for trading a one lot of nifty future. Let us all start with the basic. Total amount required to open position in one lot of nifty is Rs.27,000 (approx).
This is known as coxt amount required to for 1 lot of open position. A trader will need this much amount to buy or short sell Nifty future contract. Whhile us calculate taxes:Consider if we buy one lot of nifty future. Traring lot of nifty future has 50 quantities. Photo: Hindustan Times. Real long-term investors seem to have shifted their attention from stocks to other products.
At least 90% of overall trade value now takes place in derivatives rather than cash. Cash trading, or the buying and selling of shares where cash is paid and the delivery of stock is taken, has fallen from just over 10% in June 2011 to just about 7% in Why is transaction cost important while trading Nifty Futures year June. A derivative is a financial product that gets its value from an underlying asset.