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Forwards Futures Options Trading India Article
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Futures Options Trading
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Futures trading is a risky business. It is a financial gamble. And, like any gamble, you will never know when you will win and when you will lose. The key is simply to play the game based on the cards you are dealt with, what you know about the market so far and hope for the best.
Many traders are lured into futures trading because of the great rewards it can potentially bring. However, you must keep in mind the rule of opposites, in that with great rewards, also come great downfalls. Futures trading, because you're gambling with something that is yet to happen, is nowhere near accurate.
This can also happen when you're dealing with options, because, the value of underlying options are basically placed against futures contracts. When you acquire options, more likely than not you will get them at a discounted rate based on the price of the product at the time they were issued.
Options may be exercised at a given time in the future and at the rate at which they were issued, but the holders stand to gain or lose depending on the value of the options at the given future date. Thus, when you really look into the nature of futures and options, they are very similar and related.
Some tips when entering the options/futures market:
The market is unpredictable.
No matter what experts say or predict will happen to the market months or years from now, nobody will be able to make perfect forecasts. Therefore, if you're planning to invest your hard-earned money into financial trades, do not put all your eggs in one basket.
While it is possible that you will make a fortune out of this risk, it is also likely that it will be the one that will send you to the poorhouse. Tread carefully.
Trading options and futures requires research on your part
Futures trading involves 4 investment categories: namely, speculation, growth, inflation hedges and income. Without adequate knowledge of these four, you won't be able to move freely in the trading market and might even cause yourself to lose.
Do not simply rely on somebody else to do the research and understanding for you. Being able to make intelligent decisions, no matter how inaccurate, will sometimes make the difference between a win and a loss.
You should invest no more than 10% of your net on futures.
Futures trading should not be your first foray into financial trading because it involves a considerable investment. You should only do it when you're confident that you have enough knowledge and that your other investments are working out for you.
Forwards Futures Options Trading India Specific links
Forwards Futures Options Trading India News
Indian Rupee Trades At New Record Low Against Dollar - RTT News
 IBNLive.com | Indian Rupee Trades At New Record Low Against Dollar RTT News "The position limit for the trading member...bank in the exchanges for trading Currency Futures and Options shall be USD 100 million or 15 per cent of the outstanding open interest, whichever is lower," RBI said in a notification yesterday. In defending rupee, RBI again falls short RBI imposes restrictions on forex dealers RBI bans arbitrage as rupee dives below 55 |
In defending rupee, RBI again falls short - Moneycontrol.com
 Moneycontrol.com | In defending rupee, RBI again falls short Moneycontrol.com The Reserve Bank of India announced new currency measures on Monday, including stipulating that net overnight open position limit for the rupee should not include positions taken in the currency futures and options segment. The announcement had the ... |
Indian FX/debt factors to watch-May 22 - Reuters
Indian FX/debt factors to watch-May 22 Reuters OVERNIGHT NEWS * Net overnight rupee open position limit for Indian banks shall not include positions taken in the currency futures and options segment, the Reserve Bank of India said on Monday. * The Reserve Bank of India will continue to take steps ... |
A Silver Primer - San Francisco Chronicle
A Silver Primer San Francisco Chronicle Futures/Forward and Options Contracts In the US, silver futures are traded on the commodity exchange, which is a part of the New York Mercantile Exchange. Investors and/or companies can use the contracts to hedge, invest or speculate on the price of ... |
Nifty above 4900; Cairn, Tata Motors, BHEL, Siemens up - Economic Times
 Moneycontrol.com | Nifty above 4900; Cairn, Tata Motors, BHEL, Siemens up Economic Times Meanwhile, to curb the rupee from depreciating further, the RBI excluded banks' net overnight open positions from currency futures and options segment. It also said foreign exchange future and options positions cannot be offset against OTC trades. Sensex moves southwards, rupee at record low of 55.08 vs dollar Markets may try to recover |