Before we dig deeper and understand the working of a futures contract, we need to understand a few other aspects of futures trading. Do remember at a later stage, we will revisit these points and discuss them in greater detail. But for now, good working knowledge on the following points is what is required.

Lot size – Future is a standardized contract where everything related to the agreement is pre-determined. The lot size is one such parameter. Lot size specifies the minimum quantity that you will have to transact in a futures contract. Lot size varies from one asset to another.

Contract Value – In our example of ABC jeweller and XYZ Gold Dealers, ABC agreed to buy 15 kgs of Gold at the rate of Rs.2450/- per gram or Rs.24,50,000/- per kilogram. Since the deal was to buy 15 kgs, the whole deal was valued at Rs.24,50,000 x 15 = Rs.3.675 Crs. In this case, it is said that the contract Value’ is Rs.3.675 Crs. Simply put, the contract value is the quantity of the price of the asset. We know the futures agreement has a standard pre-determined minimum quantity (lot size). The contract value of a futures agreement can be generalized to “Lot size x Price”.

Margin – Again, referring back to the example of ABC jeweller and XYZ Gold Dealers at the time of the agreement, i.e. on 9^th Dec 2014, both the parties would have had a gentleman’s word and nothing beyond that. Meaning both the parties would have just agreed to honour the contract on the agreement’s expiry day, i.e. 9^th March 2015. Do notice there is no exchange of money on 9^th Dec 2014.

However, in a futures agreement, the moment a transaction occurs, both the parties involved will have to deposit some money. Consider this as the token advance required for agreeing. The money has to be deposited with the broker. Usually, the money that needs to be deposited is calculated as a % of the contract value. This is called the margin amount’. Margins play a pivotal role in futures trading; we will understand this in greater detail later. For now, remember that to enter into a futures agreement, a margin amount is required, which is a certain percentage of the contract value.

Expiry – As we know, all futures contracts are time-bound. The expiry or the expiry date of the futures contract is the date upto which the agreement is valid. Beyond the valid date, the contract ceases to exist. Also, be aware that the day a contract expires, the exchanges introduce new contracts.

With these few points that we have discussed so far, I guess we can now understand a simple example of futures trading.

Key Features

1. Our Research Officers by whom calls are generated and provided to you have over 5 years of experience in the securities market.

2. More than 13 technical tools are used in the recommendations that are provided to you. As an example, RSI MACD Bollinger Bands etc.

3. The recommendations that are provided to you are fundamentally checked for up to 5 years.

4. Recommendation is provided to you only after studying the option chain.

5. FII & DII activity is also analysed and studied before recommendations are generated.

6. We do a thorough study of the Indian economy before generating any recommendations.

7. Before giving you any recommendation, our research team studies the policy of Reserve Bank of India.

8. Before giving any recommendation our researches do a complete study of nasdaq dow jones sgx nifty and asian market.

9. Our researchers closely monitor global breaking news and domestic breaking news before giving any recommendations.

10. Our research also studies the price action before giving any recommendations.

11. Future that all our recommendations and calls will be for intraday only.

12. All recommendations and calls of  future will be received by messages.

Do’s and don’ts

1. Use only 10% of your capacity while taking index option trades.

2. Make sure to maintain stop loss while taking any trade.

3. Do not carry any future trade to the next day, close it the same day.

4. If you are taking a trade on your own then do take our opinion on it.

5. Do not trade in the market by taking any kind of loan and if you are a minor or you do not have income or you are a senior citizen then try to avoid futures.

6. We also closely follow mutual fund activity and promoters activities before giving any recommendations.

Sample calls

• FUTURE CALLS BUY {NIFTY} AT {17000} TGT 1ST{17050} TGT 2ND {17100} SL {16900} FOR

Why the trader should take this service

•  This service is pocket friendly.
•  Because this is a basic service, you will get recommendations only.
•  This service creates discipline among traders.
•  This service can strengthen your decision to take a trade.
•  This service will also teach you about trading psychology.