Trading In The Indian Stock Market –
Both the major stock exchanges in India that is the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have created a number of indices. Some of the major indices are as follows:
BSE 30 (Sensex)
BSE 100
BSE – 200
BSE –500
S & P CNX Nifty
S & P Mid cap
S & P CNX 500
The Sensex and Nifty are the most popular indices. Both of these are considered bench mark indices
Trading is also allowed in Index Futures. A Index future are the future contracts for which the underlying is the cash market index. In India futures on both BSE Sensex and NSE Nifty are traded. By trading in this index futures the investors are betting on the state of the economy or collectively on the future market values of the shares of leading companies from major industrial groups. In a normal contract for purchase of equity shares, physical quantity of shares is delivered but in a futures contract there will be nothing to be delivered.
In the cash market there is an ascertainable quantity of the security that is being traded. This quantity is subject to the upper limit of the amount of floating stock. In futures trading, the contracts are generated according to the interest of the contracting parties and as such hypothetically any numbers of futures can be traded. Both the BSE and NSE have introduced trading in index future according to a similar pattern.
Any eligible investors who can trade in the cash market can trade in the futures market. For every buyer there is a seller of the futures. What makes them agree on the contract value is the divergence of the views on the likely value of the index future at the expiry of the contract. The contracts are traded in one month two month and three month expiry circles. All contracts expire on the last Thursday of the relevant month.
On the Friday following the last Thursday, a new contract for that expiry period would be introduced for trading. Thus at any point of time, three contracts would be available for trading with the first contract expiring on the last Thursday of that month.
About the Author
Visit site for more trading tricks Intraday Calls
Previous Article - Next Article
Add Your Picture
Article Submitted By:
share2010
Subscribe To: share2010 Rss Feed
This Article Has Been Read 46 Times
Publish/Share this article
Remember: The article body, title, author bio and links may not be changed or removed. By publishing this article, you agree to all the terms in our Terms of Service.
Rating: Not yet rated
More articles in this Category
Insight into Commodity Markets
Dividend What does it mean to investor
Dabba Trading
A Lesson in options and futures
Why prices go up and down in the stock market
Sensex 12000 12800 13000 What to do?
How to enter Stock Market - Direct Equity Participation or Mutual Funds?
Do Operators run the stock market
A Beginner's Guide to Investing in Shares
Best Financial Newsletters Allowing You To Become In Charge Of Your Finances
Trading In The Indian Stock Market –
Impact of Indian Stock Market on Daily Life
Is the bubble forming again in the Indian stock market?
Understanding the jumps of the stock market
ETFs - The Best Investment Idea
Technical Analysis In The Stock Market
Mutual Funds Trading Is Safe For Small Investors?
Are you overpaying your stock broker?
Why The Stock Market Crash Of 1929 Occurred
Stocks Trading: Choosing Winning Penny Stocks
The Best Mutual Funds How to spot the winners
Swing Trading Stock: Simple Swing Trading Strategy
Options Trading Expiration Date Selection
Buying Stock Versus Stock Option Trading
Stock Exchange: Long-Term And Short-Term
Stock Trading Basics To Know
Best ETF Newsletter Allowing You To Stay On The Forefront Of Your Investments
Construct an accurate Portfolio prior to Trading in Stocks and Shares
A CTA Managed Fund For Balanced Asset Allocation
