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Wednesday 18 January 2012

Equity derivative and nifty futures

Equity derivative is a kind of derivative whose value is at least derived partially from one or more underlying equity securities. For better understanding we must know what exactly a derivative is, it is simply a contract between two parties that comprises certain conditions on a particular speculative amount, date like this on some underlying equity securities.

There are different types of equity derivatives available in the stock exchanges like ‘futures’, ‘options’, ‘convertible bonds’ etc .

National Stock Exchange (NSE) which is a major stock exchange of India, launched its derivative sector in the year 2000. ‘Futures’ and ‘options’ are the most renowned segments of nse’s equity derivative part.NSE which is the 9th most powerful stock exchange in the world can provide you a good number of trading options under its equity derivative segment,  Nifty Midcap 50 index, S&P CNX Nifty Index, Bank Nifty are some of the example of those trading options.

The National Stock Exchange or nseindia presently offers trading on  9 major indices and 226 securities  for its Futures and Option segment.

stock futures is exactly a contract between the two parties for buy or sell of some asset in coming future. The contract includes generally details of the asset, date and the speculative price for the future.

stock futures segment is may be risky or safe depending how good you are in speculating and on what basis you do this if every thing will run according to you then for sure you are going to gain a very good margin or else you may have to face a heavy loss.

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