EXPERT TIPS
FOR TRADING IN NIFTY FUTURE
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.
