Bullet Advisory Indian Stocks Publishes How To Trade Nifty Future

Jan. 20, 2009 - PRLog -- 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.
Narendra Nainani
AHMEDABAD, GUJARAT, India    
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.
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