How does futures trading work?
Futures trading lets you speculate on the price movement of assets—like stocks or indices—without needing to buy them outright. On FYERS, you trade futures contracts by paying a margin instead of the full contract value, giving you leveraged exposure to the market.
Key concepts in futures trading
- Futures contract: A legal agreement to buy or sell a specific asset at a predetermined price on a future date.
- Margin: The upfront capital (a small % of the total contract value) required to open a trade. This enables access to larger positions.
- Leverage: With margin, you control a larger exposure than the capital deployed. Gains and losses are amplified.
Example of a futures trade
Let’s break down a simple trade scenario:
- You select a futures contract for 100 shares priced at ₹500 each.
- Total contract value = ₹50,000
- Required margin (10%) = ₹5,000
- If the price rises to ₹550 → Contract worth = ₹55,000 → Profit = ₹5,000
- If price drops to ₹450 → Contract worth = ₹45,000 → Loss = ₹5,000
This illustrates how both profits and losses are calculated based on the contract’s total value—not just your margin amount.
What if...
| Scenario | Resolution |
|---|
| You don't have sufficient margin | The order will not be executed. FYERS will alert you on the margin shortfall. |
| The market moves quickly | High leverage can lead to rapid gains—or losses. Monitor positions carefully. |
| You hold the contract till expiry | FYERS will settle or square off your position based on exchange rules. |
Tip:
Use FYERS’ “Funds & Margin” section to track your margin usage and ensure you maintain required balances to avoid auto-square off. Last updated: 01 Jul 2025