What exactly are Futures Contracts, and how do they help traders look into the future of stock prices? In this tutorial, we continue simplifying the world of Derivative Markets with real-world examples.
What we will cover in this video:
The Definition of Futures: Understanding financial derivatives where two parties agree to trade an asset at a set price on a future date.
Real-World Example: A simple breakdown using Reliance shares—how a trader anticipates a price move from ₹1000 to ₹1200.
Stock Futures vs. Index Futures: Discovering the difference between how stock contracts and index contracts operate.
The Rule of Expiry: A detailed explanation of why stock future contracts expire on a monthly basis, specifically on the last Thursday of every month.
Whether you want to hedge your portfolio or start trading derivatives safely, understanding the mechanics of a futures contract is absolutely essential.
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