Monday, October 10, 2022

WHAT IS THE BEST WAY TO GET STARTED IN FUTURES TRADING?

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Futures and options are the part of derivative and mostly it is used for hedging by institutional investors.In order to initiate trading in FUTURES you have to understand how it works and how can get profit with your own analysis and experience.Options and futures are both financial products investors can use to make money or to hedge current investments. Both an option and a future allow an investor to buy an investment at a specific price by a specific date. But the markets for these two products are very different in how they work and how risky they are to the investor.
Understand how futures work & the risks
The investor may instead decide to buy a futures contract on RELIANCE. One futures contract has as its underlying asset 250 shares of reliance. This means the buyer is obligated to accept 250 shares of reliance from the seller on the delivery date specified in the futures contract. Assuming the trader has no interest in actually owning the reliance, the contract will be sold before the delivery date or rolled over to a new futures contract.
Risk
As the price of RELIANCE rises or falls, the amount of gain or loss is credited or debited to the investor's trading account at the end of each trading day. If the price of Reliance in the market falls below the contract price the buyer agreed to, the futures buyer is still obligated to pay the seller the higher contract price on the delivery date.

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