Future contract
This query is : Resolved
04 May 2017
Sir,
My query is who fixes the price of future contracts? Does the seller of futures has to own the shares or is it possible to short sell it? If so whether it has to be bought before the market close like what we do in short selling of shares?
My query is who fixes the price of future contracts? Does the seller of futures has to own the shares or is it possible to short sell it? If so whether it has to be bought before the market close like what we do in short selling of shares?
CA. Sunil Gokhale
(Expert)
04 May 2017
Price in a futures contract is decided by buyer & seller. You can see on the stock exchange website the offers made by buyers & sellers. Either access any offer or put your own.
You do not need to own any shares as the final settlement is in cash only. Futures expiry on the last Thursday of the month. At any given time there are 1, 2 or 3 month futures ate available for trade.
You can hold the futures till expiry or get out of the contract before expiry by taking a reverse position.
The stock exchange determines the settlement price on expiry.
You do not need to own any shares as the final settlement is in cash only. Futures expiry on the last Thursday of the month. At any given time there are 1, 2 or 3 month futures ate available for trade.
You can hold the futures till expiry or get out of the contract before expiry by taking a reverse position.
The stock exchange determines the settlement price on expiry.
Message likes :
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04 May 2017
Sir is it possible to sell a future contract without buying it?
CA. Sunil Gokhale
(Expert)
04 May 2017
Yes. A futures contract is a contract to buy (long futures) or sell (short futures)
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