BEGINNER’S GUIDE TO TRADING NSE FUTURES by Vikram SinghIf you have decided to enter into the world of trading and do not know what to do next and where to start, then this can be the right book for the beginners. This book explains
a) Finding broker and opening an account
b) Understanding Futures
c) Understanding various kinds of orders
d) Understanding basic price chart
e) Understanding day trading vs swing trading
f) Starting on a Journey to become successful trader
What Are Futures Contracts? Beginners Guide To Trading
Futures Trading: Beginner's Guide To Trading Futures
Learn the basics of futures trading , how to get started with a futures broker, different trading strategies as well as the history of the futures and commodities markets. A futures contract , quite simply, is an agreement to buy or sell an asset or underlying commodity at a future date at an agreed-upon price determined in the open market on futures trading exchanges. It's important to understand that futures contracts are standardized agreements that typically trade on an established exchange. One party to the standardized contract agrees to buy a given quantity of an underlying commodity or an equity index for example, and take delivery on a certain date. The other party agrees to provide it or make delivery of the underlying asset. This standardized contract agreement in futures trading may be clear, but how does one invest in futures trading?
A futures contract is a financial derivative that tracks the price of the underlying asset. Futures contracts are basically an agreement between a buyer and a seller to buy or sell the underlying asset at a specified price and date in the future. Unlike forward contracts, futures contracts are standardized in quantity and quality. For example, futures contracts on Brent crude, which are one of the most purchased futures contracts are basically an agreement between a buyer and a seller to buy or sell the underlying asset at a specified price and date in the future. Popular futures contracts, represent strictly 1, barrels of Brent crude of a certain quality. A seller of this futures contract needs to deliver the underlying asset — crude oil — to the buyer at the specified price and date of the contract. However, most of the futures contracts expire without any delivery taking place — the majority are settled in cash.
Futures traders generally fall into one of two categories: speculators and hedgers. In most cases, hedgers use futures to protect their business from losses if massive price volatility is seen. These investors can lock-in favorable pricing on the materials needed to run their businesses, and this allows for more accurate revenue planning for a set period of time. Cash prices and futures valuations tend to move in tandem positive correlation , so businesses can hedge some of their risk by taking out futures contracts in an amount equal to their expected raw materials needs. Positions like these are not designed to generate significant profits from the futures positions themselves.
A futures contract is an agreement to buy or sell an asset at a future date at an agreed-upon price.
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