Trading in options and futures trading


Part of that endeavor involves education. To that end, we have provided a short glossary of some basic stock market terminology to help beginning traders on their way. Those with more experience can always stand to review their knowledge, as well.

These assets represent investments. Subsequently, they allow companies, commercial enterprises, and municipalities to raise new capital. 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. Examples are quoted to make the concept clear. The article explains how a trader can employ futures contract to financially profit from his directional view on a stock or an index.

Practical examples are used to illustrate how the trade would evol.. This chapter discusses leverage, the central theme of futures trading in detail. The contract between futures and spot market is discussed.

The chapter also touches upon leverage calculation. This chapter gives you all the necessary information that you need to know before placing your first futures trade. 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..