How is futures trading different from margin trading?
In a margin transaction, the positions are squared off the very same day whereas, in futures trading, the positions can be held until the expiry of the contract. In an intraday margin transaction, the investor has the option of converting his position to delivery, provided he has sufficient cash/shares in his Demat account (depending upon whether he has a buy position or a sell position). Whereas the investor has no such option in futures transaction since all futures contracts are cash-settled.
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How does futures trading work?
To buy or sell futures, the investor is required to place a certain percentage of the order value as margin. In futures trading, the investor uses leverage to buy or sell more of the security than what he/she could have taken in the regular cash ...
How is options trading different from trading futures?
In the case of futures trading, the buyer and seller have unlimited profit potential as well as loss potential. Whereas in options, the buyer has unlimited profit potential with limited downside, and the seller has limited profit potential and ...
How much margin would be blocked for futures trading?
Margin requirement differs from one scrip to another. You can check the margin requirements in our Margin Calculator.
Can the margin requirement change for the futures contract?
Yes. Margin requirement may change due to the increased volatility in the prices. You can check the margin requirements in our Margin Calculator.
What is a futures contract?
A futures contract is an agreement between two parties to buy or sell an asset (Stocks, Indices, Currencies or Commodities) at a certain time in the future for a certain price. To make trading possible, the exchange specifies certain standardized ...