All About Equity Futures Trading in India
Last updated August 22, 2026
This IPO News guide/article covers “All About Equity Futures Trading in India”. The page is organized around futures contract definition, characteristics of futures contract, futures trading advantages, step by step futures trading, what is an underlying?. IPO News presents the structured facts and tables in its own layout and wording.
Topics Covered
- Futures Contract Definition
- Characteristics of Futures Contract
- Futures Trading Advantages
- Step by step Futures Trading
- What is an Underlying?
- What is a Lot Size?
- What is contract value?
- What is Margin and and how is it calculated?
- Why Margin changes every day?
- Why to invest in Future Market?
- What is leverage?
- How to calculate leverage?
- What is Future Payoff?
- What is Expiry?
- What is the Index?
- Which are the popular indices in India?
- Is Margin fixed for all the stocks in India?
- How long should I hold on to a position in Futures Contract?
- What is basis?
- Why all the stocks are not available for trading in Futures?
- Why my buy price changes every day in Future Contract?
- Zerodha Trade@20
- Compare Stock Brokers Side-by-Side
Key Facts
- India's trusted financial research platform since 2015. Live IPO GMP, subscription data, allotment status, Rights Issues, NCDs and unbiased stock broker reviews.
- Futures contracts are guaranteed and honored by the stock exchange and regulated by SEBI. Thus, there is no chance of defaults in futures contracts.
- Profit per share = (165 – 157) = Rs 8
- Total Profit = 3500 * 8= Rs 28,000
- The table below shows the futures price movement over the 4 days the contract was held
- Now if we sum up all the daily accounts, we will come up to Rs 28,000 which is initially calculated.
- The margin required to enter the trade is 12% of contract value, then the margin amount will be
- Margin = 12 % * 508000= 60,960 Rs
- Now, as we know margin is % of contract value,
- = 8.33 or 8.33 times or simply as a ratio 1: 8.33
- This means every Rs 1 in the trading account can buy upto Rs 8.33 worth of Reliance.
- It means Reliance has to go up or fall by 12% to lose all the margin money but if the leverage is high then only a small move in the underlying is required to wipe out the margin deposit.
- The difference between the spot price and the future price is called basis. Suppose Nifty Future trades at 5050 and spot Nifty is at 5000, then the basis is said to be -50 points or – 1%.
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Data Tables
| Day | Closing Price |
|---|---|
| 9th | 160 |
| 10th | 171 |
| 11th | 170 |
| 12th | 165 |
| Day | Ref Price for M2M | Closing Price | Daily M2M |
|---|---|---|---|
| 1st Dec 2014 | 157 | 160 | + Rs 10,500 |
| 2nd Dec 2014 | 160 | 171 | +Rs 38,500 |
| 3rd Dec 2014 | 171 | 170 | -Rs 35,00 |
| 4th Dec 2014 | 170 & 165 | 165 | – Rs 17,500 |
| Total | +Rs 28,000 |
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