Thursday, 10 January 2013



Just like Sensex is the index on BSE (Bombay Stock Exchange) similarly, Nifty is the index of Indian Share Market on NSE (National Stock Exchange). Where Nifty is taken as S&P CNX Nifty, Nifty is traded in a contract that is why it is known as Nifty Future Derivatives. The movement of Nifty Futures depends on Nifty Index.  Nifty Future is traded in lots and the permitted lot size is of 50 or multiples of 50. Just like all the other future contracts Nifty Future contracts also have a life span of 3 months which is known as trading cycle, divided into three steps the Near month, the Next month and the Far month.

Nifty Future Tips contract expires every last Thursday of the month and the term of the future contract is for three months. Like for example if we are having January February and March for the current contract more volume would be seen in the current month as compared to the other two. On the date of expiry the new contract is introduced in the market and always it is advised to trade in the current contract. As the Nifty expires on the last Thursday of the month if that day is a holiday the expiry shifts on the previous day. For trading in Nifty derivatives trader should have a margin amount in their trading account and it is a percentage of contract value which is usually about 10-12%.

Pros Nifty Future Trading

Traders get margin to trade; small traders can trade in mini lots of nifty which has a lot size of 20. One can do intraday trading or can hold their positions till the expiry of the contract it can extent from one month to three months maximum. There is a benefit in Nifty Future trading that we can trade on both the side buy when market goes up and sell when the market is down and again buy to cover up the position in the market before expiry. The brokerage required for trading in Nifty is very less which is an USP for trading as it increases the amount of profit.

One more profit of trading Nifty is the amount of volume is too high so it becomes very easy for the traders to square of their position. If on the same day buying and selling is done by the trader then the profit and loss is adjusted accordingly in the same trading session. Traders should keep in mind that they close their position before the expiry of the contract so that they are safe from the penalty.

Cons Nifty Future Trading

Trading in future contracts is full of risk, actually whichever market you trade you need to have experience as well as knowledge of the market. Investing and trading are two aspects of share market but investing is lot better and less risky.  Before trading its better if you take proper advice of the people who are the experts and experienced in the market. There are many advisory companies in the market which provide the best Nifty Future Tips by tracking the market regularly they charge for the tips and it’s better to judge the performance through free tips, not through their pricing. 

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