Thursday, June 30, 2022
Wednesday, June 29, 2022
THINGS TO REMEMBER WHEN TRADING IN NIFTY FUTURES
FOR LIVE MARKET TRADING TIPS CALL OR
Nifty futures is a common indicator of
trading in the market as a whole, as the nifty is fairly representative of the
market in particular and the economy in general. Nifty futures are essentially
futures contracts on nifty. The minimum lot size for the nifty is 75 units,
bringing the lot value to just over Rs.7.50 lakhs. What are the nifty futures
trading tips and what are the nifty futures trading techniques? Let's
understand some points to remember that will help us trade nifty futures
intraday and longer term.
Futures are usually traded with a spread above the spot price. Under normal conditions, the monthly spot rate spread is determined by the current cost of financing. It's also known as the carry cost, and futures typically trade at a premium. There are two things to remember here. Do not buy nifty futures when they are at a high premium to the spot index as this could be a case of overvaluation and over-optimism. Also, do not buy if the nifty futures are being bought at a discount as this could be a sign of aggressive futures selling. Understand the logic of the spread before trading nifty futures.
This is a leveraged position and you must treat it accordingly
Skilled futures are leveraged like all futures positions. If you buy a lot of Nifty in the next month, your margin will be around 10% for normal trades and 5% for intraday trades. This means that you get 10x leverage on a normal trade and 20x leverage on intraday trades. This works both ways. Leverage means your winnings can be multiplied, but losses can also be multiplied. Therefore, any trade in nifty futures must be done with strict stop-loss and profit targets.
Check data on open interest before taking a position
It always pays to do some scientific data analysis before taking a nifty futures position. A quick look at nifty futures open interest and its accumulation trends will give you an idea of whether open interest is building up on the long or short side. You can get a more informed view of nifty's direction.
Avoid getting in a liquidity trap
Liquidity is never a major challenge for the nifty futures as it is one of the most liquid contracts, but there are occasions when the nifty futures can fall into your liquidity trap. First, on the expiry date, you will typically find that nifty futures volume disappears once the rollovers are essentially complete. Also, in a market that is falling very sharply, spreads can widen, significantly increasing your risk when trading nifty futures.
There are multiple margin implications
Whether you are buying nifty futures or selling nifty futures, it is a linear position as it can result in unlimited gains and losses for both sides. While stop losses are a must when trading Nifty, one must also understand margins. First, there is an initial margin that you pay when entering into the position, which includes VAR margin and ELM margins. Now it is mandatory for brokers to collect these two margins and ELM is no longer optional. Second, you must pay daily MTM (mark-to-market) margins based on price movement. These affect the allocation of capital for you.
Beware the overnight risk in Nifty futures
Even if you set stop losses during the day, these orders will not cover your overnight risk. For example, if you are long Nifty futures and due to a fall in the Dow, the Nifty falls 200 points on the open, what do you do? Stop losses don't work and you are exposed to overnight risk in Nifty futures.
Understand the trade from the counterparty perspective
This is an interesting aspect of Nifty futures trading. When you buy Nifty futures there is another party selling and the same logic applies when you sell Nifty futures. The other party could be a trader or a hedger, and the open interest data gives you the insight you need. While you're usually driven by your view of the Nifty, it's always worth understanding the opposing view as it can give you more clarity into your Nifty view. Here are 8 things to remember when trading Nifty Futures.
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BUY SUNTECK 400 SHARES ABOVE 491 TG 497/503 SL 484
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Tuesday, June 28, 2022
39750/- PROFIT BOOKED IN TODAY'S FUTURE CALLS
TATA CHEM FUT ACHIEVED BOTH TARGET 813/818 BUYING CALL GIVEN FROM 808 BOOKED PROFIT OF 10650
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LIVE MARKET TRADING TIPS FOR TODAY 28-06-22
BUY TATA CHEM 2 LOTS ABOVE 808 TG 813/818 SL 802
BUY JSW STEEL 2 LOTS ABOVE 572.50 TG 576.50/580.50 SL 567.50
BUYHINDALCO 2 LOTS ABOVE 331 TG 335/339 SL 326
Monday, June 27, 2022
22900 /- PROFIT BOOKED IN TODAY'S FUTURE CALLS
HINDALCO FUT ACHIEVED BOTH TARGET@ 334.50/338.50 BUYING CALL GIVEN FROM 330.50 BOOKED PROFIT OF 12900
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