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How to Trade Nifty Future by Bullet Advisory Indian Stocks
By Narendra Nainani of Bullet Advisory Indian stocks
Bullet Advisory Indian Stocks-How To Trade Nifty In Future Everyday we listen about Nifty closing up or down,market
bullish or bearish.We wonder how to trade Nifty and earn
profit.Nifty is an index and not a stock which can be bought
and kept in a demat account then how to trade Nifty where we
cannot take the delivery.The answer is to trade Nifty future.
We can buy or sell Nifty future.What are the points we have
to keep in mind while trading Nifty future,how to calculate
the profit and loss.First of all we have to determine the
direction of the market whether market will be up or down.We
can take the position in Nifty future in the expected
direction bullish or bearish.If we are bullish then we can
buy Nifty future and if bearish then we can sell Nifty
future.What trade we can execute and what would be our
position in terms of profit and loss are explained below
with examples.If current price of Nifty in January is 2900
and last date of expiry is on nth January then what trades
we can do and what will be our profit and loss position is
as stated below. Trade we can do if we are bullish (1)Buy Nifty Future January @2900 Lot Size 50
We can sell Nifty anytime till last day of expiry i.e., nth
January and can book profit or loss.If we do not sell Nifty
we have bought till lasts day also then our trade will be
automatically squared off at the settlement price of Nifty
on last day of expiry decided by the exchange.
Different Possibilities with our Nifty buy position (1) Nifty price 2950 and sold before expiry then
2950-2900=50*50=2500.00 IRs. Profit
(2)Nifty price 2850 and sold before expiry then
2900-2850=50*50=2500 IRs. Loss
(3)Nifty settlement price 2950 and we have not sold Nifty
till expiry then
2950-2900=50*50=2500 IRs. Profit
(4)Nifty settlement price 2850 and we have not sold Nifty
till expiry then
2900-2850=50*50=2500 IRs Loss
(5)Nifty settlement price 2900 and we have not sold Nifty
till expiry then
2900-2900=0.0 IRs. No Profit no Loss Trade we can do if we are bearish (1) Sell Nifty Future January @2900 Lot Size 50. We can buy Nifty anytime till last day of expiry i.e., nth
January and can book profit or loss.If we do not buy Nifty
we have sold till lasts day also then our trade will be
automatically squared off at the settlement price of Nifty
on last day of expiry decided by the exchange. Different Possibilities with our Nifty sell position (1)Nifty price 2850 and bought before expiry then
2900-2850=50*50=2500.00 IRs Profit
(2)Nifty price 2950 and bought before expiry then
2950-2900=50*50=2500.00 IRs. Loss
(3) )Nifty settlement price 2850 and we have not bought
Nifty till expiry then
2900-2850=50*50=2500.00 IRs. Profit
(4) Nifty settlement price 2950 and we have not bought Nifty
till expiry then
2950-2900=50*50=2500.00 IRs. Loss
(5) Nifty settlement price 2900 and we have not bought Nifty
till expiry then
2900-2900=0.0 IRs. No Profit No Loss Before trading in Nifty we should be aware of the margin
requirement of the exchange.Over and above margin we will
have to settle the profit and loss on daily basis depending
on closing price of Nifty.We can get our margin money +
profit or margin money-loss back once we square up our trade.
We should also try to know the last day of expiry which is
usually on last Thursday of the month before trading.We also
have an option to trade in Mini Nifty having lot size 20
where margin requirement is less compared to Nifty.
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Contributor's Note
Narendra Nainani is renowned technical analyst and stock market advisor of INDIA having experience of more than 26 years having excellent success ratio.Expert in Derivatives Products-Futures & Options,Intraday,Short Term ,Medium Term,Long Term,Portfolio Management,IPO & Mutual Fund Advisor.Covered regularly by E TV & Business Magazines like The Economic Revolution for Market views.
India's top most no.1 best stockmarket advice blog hot stocktips calls by expert technical analyst of India.Most preferred paid subscription stocktips calls website India.Excellent success ratio of more than 90%.good superb trading ideas.
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This intel was contributed by naninn
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May, 2012
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