Trading in future and option


The contract between futures and spot market is discussed. The chapter also discusses the concept of premium, discount, and the convergence of futures and spot price. One thing is for sure; with every trade, no matter if you come out with a profit or exit with a loss, you learn something.

The chapter also includes a guide on how to interpret the change in open interest with respect to ch. In other words, how stable or unstable have market prices been throughout history? In the realm of commodity options tradingyou have to be prepared to trading in future and option the uncertainties and volatility that the futures markets can throw at you. Describes what a forward contract means along with a practical illustration of the concept.

The whole drama of it is the big question mark about what the markets may or may not do. If you trading in future and option it right, volatility can be your best friend. You must treat it with respect, and never be presumptuous or arrogant about the markets, as if you can always predict trading in future and option movements. You have to keep in mind that options is simply a game of educated guesses. The article explains how a trader can employ futures contract to financially profit from his directional view on a stock or an index.

Any attempt to have call options explained is not easy, and it normally takes a while it took me at least a week to fully grasp the concept of what a call option is, and what it represents. When this major drop in value happens, if you are wise, you will exit by offsetting your position instead of allowing your trading in future and option to expire worthless. The chapter also has a detailed description on beta and method to calculate t.

The whole point of buying call options is that you expect the price to rise in the relatively near future. The chapter explains all that you need trading in future and option shorting, be it futures or stocks with practical real life examples. If you use it right, volatility can be your best friend. Option Strategies 13 chapters 7.

All that you need to know about Nifty futures is discussed in this chapter including the impact cost, liquidity, and benefits of trading Nifty future. Leverage truly is a two-edged sword. Once you understand a little about market psychology, you can truly exploit volatility to create some serious profits in a relatively short period of time. Nonetheless, I hope this little diddy on call options explained has at least begun to bring some clarity to this detailed area of investing. Markets and Taxation 7 chapters trading in future and option.