Future options trading in india


Just as when price goes up on rising volume, it is a bullish sign; so it is with open interest. In fact, here are the rules for trading with open interest:. With the introduction of intraday data for futures and options in Investar, you can now use the intraday screener to scan all the NSE futures for those futures that are gaining on high open interest in intraday specifically in 5-min, min, min and min timeframes.

This can give an additional confirmation, e. Open interest also gives you key information regarding the liquidity of a future or option. If there is no open interest for an option, there is no liquidity for that option.

When options have large open interest, it means they have a large number of buyers and sellers, and hence more liquidity and this will increase the odds of getting option orders filled at good prices. So, all other things being equal, the bigger the open interest, the easier it will be to trade that option at a reasonable spread between the bid and ask.

Volume for a futures contract is simply the number of contracts that have been traded on a particular day. Volume does not distinguished between how many contracts were opened or closed long or short. It also does not give a clear picture about how many contracts were opened and are still open in the market, while Open Interest is a cumulative total of all the open contracts at the end of the day.

While volume will reset each day, the open interest carries over to the next day. Your email address will not be published. This can be summarized in the following table: In fact, here are the rules for trading with open interest: Price Open Interest Interpretation Rising Rising Bullish Rising Falling Bearish Falling Rising Bearish Falling Falling Bullish With the introduction of intraday data for futures and options in Investar, you can now use the intraday screener to scan all the NSE futures for those futures that are gaining on high open interest in intraday specifically in 5-min, min, min and min timeframes.

Differences between Open Interest and Volume Volume for a futures contract is simply the number of contracts that have been traded on a particular day. The article explains how a trader can employ futures contract to financially profit from his directional view on a stock or an index. Practical examples are used to illustrate how the trade would evol.. This chapter discusses leverage, the central theme of futures trading in detail.

The contract between futures and spot market is discussed. The chapter also touches upon leverage calculation. This chapter gives you all the necessary information that you need to know before placing your first futures trade. The chapter also throws light into why brokers and exchanges charge margins.

This chapter gives you an overview of how to use a margin calculator. In addition the chapter also touches upon spread trading such as calendar spreads.

The chapter explains all that you need about shorting, be it futures or stocks with practical real life examples. Emphasis is also made on things you need to take care of when you short stocks or futu..

This chapter is a primer on trading Nifty Futures. 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.. This chapter is a primer on how future contracts are priced with respect to the spot prices. The chapter also discusses the concept of premium, discount, and the convergence of futures and spot price.. This chapter gives a step by step instruction on how to hedge a portfolio of stocks with the help of a futures instrument.