All About Future segment in share market

Trading or investing in the future is the contract between buyer and seller and the National exchanges work as a medium of exchange between buyer and seller. In other words future segment is the contract between buyer and seller at a certain date in the future. The contract may be on commodities and stock etc. Before investing or trading in the futures, it is very important to know everything about future segment. Even though the future trading seems easy but it is not easy because it requires a lot of experience to get profits in the futures market. In this article you will get basic and important knowledge about future segment and it will help you taking correct positions in a future segment. If you don’t know how to trade in the Future Segment, you can trade on the basis of Stock Future Tips.

Expiry Date
An expiry date is the last date of contract in the future and also we can say that it is the date of fulfillment of commitment. In other words it is the contract date between buyer and seller, where seller commits to deliver his stock to the buyer at a fixed date. It is the certain date in the future, which plays an important role in future trading.

The role of cash market in future segment
Cash market is a public financial market in which financial instrument or commodities are traded for immediate delivery. Cash market is also known as a spot market because buying and selling are accomplished on a same day or settlement is done by on same day. The cash market affects the future market because if the price of the stock in the cash market is high then the price of the stock in the future will be high and if the price of the stock in the cash market is low then the price will be low in the future market.

Even though the price does affect the future but it is not always be the same. It is not mandatory that the price of future market is always regulated by the price of cash market. There are many traders and investors who have made assumptions that the price of future market is always derived by the price of cash market. For example, if the price of agriculture commodity is high in the cash market and if the upcoming weather is not suitable for agriculture commodity then there is a high possibility to see a decrease the price of it in the future. The difference between the price of cash market and future market is called cost of carry.

Lot Size
In future market the buyer has to buy the commodities in a lot and the size of lot is decided by the exchanges. It is the same as whole sale market where accessories are sold in bulk.

Where should you invest in cash or in future?
For investing in the cash market or future, you should know where the active trends are going on? If the number of active trends is higher in the future then you should invest in future and if the number of active trends is higher in cash market then you should invest in the cash market.
You can trade on the basis of Stock Future Tips to trade effectively in the Futures Segment.

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