Trading in options and futures trading


These securities denote ownership in a corporation. Generally, stocks consist of two different types:. On the stock market, ETFs trade like stocks but more closely resemble mutual funds. They hold stocks, commodities, and other assets while remaining tradeable themselves.

Because they reflect an index, their prices change throughout the day. In contrast, mutual funds have their net-asset values NAV calculated at the end of the business day.

ETFs combine the flexibility of stocks with the diversification inherent in mutual funds. That, in addition to their tax efficiency and low costs, make ETFs an appealing choice for many traders.

These highly versatile securities represent sellable contracts. Due to their high liquidity, options usually carry more leverage than stocks but require less capital, giving traders with less buying power more choices when diversifying their portfolios.

Futures, like options, consist of sellable contracts. However, unlike options, futures require the holder to fulfill the terms of the contract at the time of expiration. In practice, traders can still buy or sell futures in much the same way as options. The chapter also throws light into why brokers and exchanges charge margins. This chapter gives you an overview of how to use a margin calculator. In addition the chapter also touches upon spread trading such as calendar spreads.

The chapter explains all that you need about shorting, be it futures or stocks with practical real life examples. Emphasis is also made on things you need to take care of when you short stocks or futu.. This chapter is a primer on trading Nifty Futures. All that you need to know about Nifty futures is discussed in this chapter including the impact cost, liquidity, and benefits of trading Nifty future..

This chapter is a primer on how future contracts are priced with respect to the spot prices. The chapter also discusses the concept of premium, discount, and the convergence of futures and spot price.. This chapter gives a step by step instruction on how to hedge a portfolio of stocks with the help of a futures instrument. The chapter also has a detailed description on beta and method to calculate t..

This chapter explores in details the concept of open interest and its relevance to futures trading. The chapter also includes a guide on how to interpret the change in open interest with respect to ch..

Background — Forwards Market An introductory article on Futures. Introduction to Stock Markets 14 chapters 2. Technical Analysis 20 chapters 3.