Futures trading explained pdf
An introductory article on Futures. Describes what a forward contract means along with a practical illustration of the concept. The article discusses the procedure for settling the forward contract. The article starts by discussing the drawbacks of Forwards contracts and progress to discuss how a futures contract overcomes these drawbacks. Examples are quoted to make the concept clear. The article explains how a trader can employ futures contract to financially profit from his directional view on a stock or an index.
Practical examples are used to illustrate how the trade would evol. This chapter discusses leverage, the central theme of futures trading in detail. The contract between futures and spot market is discussed. The chapter also touches upon leverage calculation. This chapter gives you all the necessary information that you need to know before placing your first futures trade.
The chapter also throws light into why brokers and futures trading explained pdf charge margins. This chapter gives you an overview of how to use a margin calculator. In addition the chapter also futures trading explained pdf upon spread trading such as calendar spreads.
The chapter explains all that you need about shorting, be it futures or stocks with practical real life examples. Emphasis is also made on things you need to take care of when you short stocks or futu. This chapter is a primer on trading Nifty Futures. All that you need to know about Nifty futures is discussed in this chapter including the impact cost, liquidity, and benefits of trading Nifty future.
This chapter is a primer on how future contracts are priced with respect to the spot prices. The chapter also discusses the concept of premium, discount, and the convergence of futures and spot price. This chapter gives a step by step instruction on how to hedge futures trading explained pdf portfolio of stocks with the help of a futures instrument.
The chapter also has a detailed description on beta and method to calculate t. This chapter explores in details the concept of open interest and its relevance to futures trading. The chapter also includes a guide on futures trading explained pdf to interpret the change in open interest with respect to ch.
Background — Forwards Market An introductory article on Futures. Introduction to Futures trading explained pdf Markets 14 chapters 2. Technical Analysis 20 chapters 3. Fundamental Analysis 16 chapters 4. Futures Trading 12 chapters 5. Options Theory for Professional Trading 23 chapters futures trading explained pdf.
Option Strategies 13 chapters 7. Markets and Taxation 7 chapters 8. Trading Systems 10 chapters.
A Bond Future is a contractual obligation for the contract holder to buy or sell a Bond on a specified date at a predetermined price. The buyer long position of a Bond Future is obliged to buy the underlying Bond at the agreed price on futures trading explained pdf of the future. The seller short position of a Bond Future is obliged to deliver the underlying bond at the agreed price on expiry of the Future.
Register as a client with an futures trading explained pdf JSE Interest Rate and Currency Derivatives memberfutures trading explained pdf the required futures trading explained pdf margin and sell or buy according to your needs. Turn on more accessible mode. Turn off more accessible mode. Bond Futures A Bond Future is a contractual obligation for the contract holder to buy or sell a Bond on a specified date at a predetermined price.
Who is this for? Hedgers use Bond Futures to protect an existing portfolio against adverse interest rate movements. Hedgers have a futures trading explained pdf interest in the underlying Spot Bonds and use Futures as a way of preserving their value. Arbitrageurs profit from price differentials of similar products in different markets, like the price difference between the Spot Bonds and the Futures.
Investors use Bond Futures to enhance the long-term performance of a portfolio of assets. Speculators use Bond Futures in the hope of making a profit on short-term movements in prices. Features Offer the opportunity to gain similar exposure to interest rates as you would with Spot Bonds, but at a fraction of the cost.
You do not pay the principal or hold the physical Bond unless the future is held to expiry. Can be used to protect an existing portfolio from adverse interest rate movements or enhance the performance of a portfolio over time. Are standardised contracts traded on a regulated exchange which reduce the risk of both parties and increase the liquidity in the secondary trading market, making Bond Futures easy to buy and sell.
Allow investors to gain advantage from price movements in Spot Bond prices because they can take a view as to whether the prices will climb or decline. Investing futures trading explained pdf Bond Futures can be risky because it involves trading at a future date with only current information. The risk is potentially unlimited, for either the buyer or seller of the Bond, futures trading explained pdf the price of the underlying Bond may change drastically between the exercise date and the initial agreement.
The basis narrows as the Bond Futures contract nears expiry. This is known as basis convergence. While Futures trading can eliminate price level risk, it cannot eliminate the risk that the basis will change unfavourably and unpredictably during the lifetime of the Futures Contract.