Earning money from the stock market is not an easy task as earlier. For that a proper research fundamental studies is required. As a beginner it is mandate to take help of financial advisor from the selected brokerage firm. Aditya Birla Money LTD, Motilal Oswal ltd etc is one of the oldest and trusted stock broker who can be rely on for trading and investment purpose. They can guide you in a proper way for stock market investment.
Well, most of the queries comes that how to make money from nifty futures and options. To be fact taking trade on Derivatives might rewards an unlimited returns with higher risk reward ratio. It is like fast moving digit with high volatility and high liquidity. Ups and downs are always there in this counter which attract traders for fast earnings. Margin leverage limit for FnO are not available by broker as risk involved ratio is too high.
To switch trade on derivatives from the cash segment is like upgrading trade activity. The more you trade the more you learn. The more you learn the more your prediction goes right. Please note it is advise for senior citizens to avoid taking trade on futures and options because the fluctuating price can give mental stress. As risk taking capacity is less compare to others normal age. Lets begin nifty futures and options strategy.
There are two types of derivatives functional available: Futures and Options. In Futures 20-30% margin required of actual value. For example, if I want to buy Nifty July Contracts Futures in carry forward, I should have 1.40 lacs in my ledger. Nifty Futures minimum net quantity is 75 per lot. Now due to high volatility some brokers have raised margin. For better understanding of margin please find the below image.
Now the question is if the above margin is available in ledger, one can take position on Nifty Futures. Nifty previous close was 10288.99 and Open at 10378.90, touch Low 10311.25 and made high 10409.85 below image can give you brief idea. If I buy Nifty one lot which carries 75 quantity at previous day closing basis 10288.9 and sold at day high or near 10400. My earnings per lot is 111*75=8325 as per the above calculation.
Now if I have limited money and couldn’t afford buy Nifty futures, then I can buy options paying premium only. If I think Nifty may rise I would go for call options strike price of 10300ce. If Nifty surpass 10300 my premium price will go higher. For example if I buy 10300ce options at 138, I need to pay premium 138*75=10350. My risk of loosing money is RS.10350 and gain is unlimited. So, if I buy 10300 call options and I am bullish that market will go up similarly the premium will go high below image will make you understand. If I bought at 138 and sold at near 170-178 range then my highest earnings will be RS 3000 if I sell at 178.
On the contrary, I feel market will fall and bought Nifty 10200 put options. For example if I buy nifty 10200pe at Rs.88 and sell at near 120-127 my maximum earnings will be RS.2925 if I sell at 127. If I bought at previous close then I will be in loss as it has made 127 day high. Find the below image for better view.
I hope the difference between Nifty Futures and Options tutorials make you understand. In brief, Nifty Futures requires higher margins in comparison to the Nifty options. And within a limited amount one can make huge profit out of it. Please stay tuned with us follow us on Facebook and Twitter for more live updates.