123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

Best Option For Trading In Stock Market – Futures Contract

Profile Picture
By Author: Rinu gour
Total Articles: 2
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

In Future trading are a forward contract which can be traded between the two parties and the parties initially agreed to buy and sell the assets at an agreed price, the delivery and the payments occur in the future and its a derivative product.

It is a marketplace between the buyer and the seller and these contracts are negotiated at future exchange were a buyer is a long position holder,and the selling party is a short position holder.

Financial future introduced in 1972 in which currency future , stock market index future, and the interest future that have played an important role in the overall future market. Future Trading came in India in the early 19th century in the Marwari businessmen commodity. Bombay Cotton Trade Association is the first contract which was established in 1875 and is the organized future contract.

The exchange traded contract are traded while they exchange the assets which would buy or sold in how, when, where and in what quantity it should be delivered. For Example in a contract if a delivery of oats 1 par value but it permits delivery of oats 2 for the certain penalty per unit.

On ...
... the first day of the market opens the trading of new future contract exist. They are not issued for other securities but they create when open interest increases and also it destroy when open interest decrease in which traders resell for reducing their long position and they re-buy for reducing the short position.

Speculators on future price fluctuation which do not intend to make or delivery which should take care to zero their position for prior contract expiry. These contracts are not between the original buyer and the original seller but it holds the expiry and the exchanges.

Example
If an oil producer plans to produce 1 million barrels of oil for delivery in 365 days, and its current price is $50 per barrel. The producer produce the oil, they gamble it, and they sell it at the current market prices. They locked at the guarantee sale price while entering in the future market. This model is used as the account the current spot price, convenience yields, dividends, dividend yields. Oil future contracts are priced for 1 year is $ 53 per barrel. The producer is delivering 1 million barrels oil ant its gives guarantee to receive $53 million. Spot market price received $53 price per barrel at the same time.

The future contract is categorized into hedgers and speculators. There are many assets which have future contracts available they are of the dozens of stock market indices and also on the currency pairs and the interest rates. There are many contracts which are available for every commodity. For example, natural gas, industrial metal, precious metal, seeds, livestock, grains, these all are tradable and available on future contract.

Contract Month
Future contract is as same as with the options market in which they are valid in a specified period of time. These contracts are delivered and it will be either expired. In Contract which delivery takes place in the month, and also the contract month is also called as the delivery month.

Option on Future
An option on the future contract which gives the holder for investing and the right to enter on the specified future contract.The initial holder of the option which would enter into the contract and buy the assets on the future price where as the investors also enter into the future contract as the short and sell the assets at the specified price in the future date.


In the stock future trading buy and sell, it may seem as risky and complicated. It is a global market place to buy and sell commodities for spot or by the future delivery. Future market is the one which buys and sell future contracts as a price per unit, quality, type and quantity of the commodity as when the contracts expire. The two players are hedgers and speculators of the future market in which hedgers gives its efforts in minimizing the risk or to avoid rising and declining prices whereas speculators they try to gain profit from the risk by buying or selling.

Total Views: 460Word Count: 689See All articles From Author

Add Comment

Investing / Finance Articles

1. Top 5 Loan Secrets For Women Entrepreneurs
Author: Mpower Credcure Team

2. Mastering Currency Trading: Strategies For Profitable Returns
Author: hoardingonrent

3. Unlock The Secrets Of Itin Application: Your Guide To Obtaining An Itin Number For Non-us Citizens
Author: itin.support

4. Simplify Your Itin Application Process And Save With Our New Year Discount
Author: itin.support

5. Paystand Named Winner Of Fintech Breakthrough Award For Defi Innovation
Author: Orson Amiri

6. How To Sell Usdt In Dubai: A Comprehensive Guide
Author: cryptodubaiotc

7. Navigating The European Crypto Landscape: A Guide To Buying Usdt In Europe
Author: cryptoeuropeotc

8. Exploring The Rise Of Usdt Otc In Dubai: A Hub For Crypto Investors
Author: cryptodubaiotc

9. Explorez En Toute Sérénité Avec Un Guide Compétent : Voyage Privé En Inde
Author: Voyage en Inde en 2024

10. Mastering The Art Of Profitable Trading: Strategies And Tips
Author: hoardingonrent

11. Take Profit Order - A Quick Review And How It Works?
Author: Growlonix

12. Federal Interest Rate And Forex Market
Author: Shyamkumar

13. How Does A Loan Against Mutual Funds Help A Financial Emergency?
Author: Abhi

14. Crypto Trading Signals – A Better Opportunity To Trade Like A Pro In 2024
Author: Growlonix

15. How To Check Loans Using A Pan Card
Author: Loanswale

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: