What is Future Trading:-
In futures trading, it is the obligation of both the buyer and the seller to deliver the specified price and commodity to each other at the stipulated time so that the contract can be completed. In futures trading, the predetermined price is called the future price and the predetermined time is called the delivery date.
In futures trading, the predetermined price is called the future price and the predetermined time is called the delivery date. There is no minimum account of any kind in this. If you are interested in futures trading, then you can start it with as little money as possible.
Features of Futures Trading:-
Future trading has many features in itself, due to which futures trading is very popular today. Let us know some of the features of futures trading which are as follows.
1. The price of a futures contract depends on its assets. If the price of the assets increases, the price of the futures contract also increases.
2. Futures contracts can be transferred and traded with other traders.
3. If a person wants to go out of his contract, he can go out for which he will have to pay a penalty.
4. Future trading is a future trade of two parties in which there is always a fear of not fulfilling their contract by both the parties. Due to which neither side leaves the soda in the middle.
5. Futures trading is run smoothly by SEBI, in which the chances of default are negligible.
Futures trading has its own rules, it is not according to the trader. It works on its own standards.
6. In futures trading, there is a fixed time of settlement in which both the parties complete the contract on time according to their contract and for this no physical movement is required.
futures trading requirements:-
One thing you must have understood about futures trading is that it is a future deal. Generally, in futures trading, due to lack of money earlier and the goods not being ready, futures contracts were done. In which you used to sleep today and later it used to end at a fixed price and transaction of goods. But at present, futures trading in all segments started with this assumption. Due to futures trading, it is easy to get the future price and its related estimates so that the segment in which futures trading is taking place remains stable. But this was not the case during spot trading.
You do not need any minimum capital in futures trading. It depends on your trade, here you can also trade by taking margin from your broker which will have to be paid to the broker at the end of your trade.
risk in futures trading:-
Just as there is potential to make profit in futures trading, similarly there are many risks in it. If you are doing futures trading for the first time, then you must know about the risks associated with futures trading.
In futures trading, you have to manage your money very carefully.
If the market is not according to you, then you can get involved in a lot of liabilities.
You have to be very careful about the value of the decision you take and the trade that is going to take place.
Benefits of futures trading:-
Leverage – In futures trading, you get a very high margin so that you can take positions by paying a small part of the value of your contract.
Liquidity – trades are held every day in the futures market, so that the trader gets a lot of liquidity.
Low Brokerage and Commission – Brokers charge very less in futures trading so that a trader does not have to bear any extra burden. So that he can sleep more.
Hedging – With the help of hedging, you can reduce the loss in your futures contract or you can help in stabilizing the price of the security.
Short Selling – Short selling is legally permissible in futures contracts, so that short selling is more here.
Futures Trading Challenges:-
Since the profit potential is high in this type of trading style. Hence, the challenges are much tougher as compared to other traditional forms of investment.
Making Objectives: As your emotions begin to drive investment decisions for you, you can assume that your profits are going to dwindle. You need to be 100% objective in your trading options, especially when you are in the futures.
Don’t deviate from your goal: In general, futures trading has to be careful. Thus, as long as you are engaging yourself in futures trading, make sure you are fully immersed in your research and analysis.
Following are some of the challenges you will face in futures trading:-
Making Objectives: As your emotions begin to drive investment decisions for you, you can assume that your profits are going to dwindle. You need to be 100% objective in your trading options, especially when you are in the futures.
You need to be aware of the new concepts emerging in the market, as the stock market itself is very dynamic.
As long as you are able to deal with these and other related challenges, futures trading is definitely one of the trading that can fetch you reasonable returns on a consistent basis.
best future trading App 2022
- Upstox Pro App.
- Angel Broking.
- Groww app.
- 5paisa online trading app.
- Sharekhan App.
- Motilal Oswal MO Investor App.
- Edelweiss Online Trading App.
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