Basic question on futures trading

I never did a future trading, so have some basic questions before starting it.

  1. If I buy using MIS/NRML FUTSTK today and sell it using MIS/NRML and it on a profit of 2 rs and a 5 lot of 125 that expires on 24Dec 2014, in this case profit is 1250 rs .

  2. Now the question is have i exited the contract now or still i am obligated to buy the underlying stock at the end of the contract expiry ?

If not how to properly exit the contract without buying the underlying stock.

  1. If i am not selling it on the same day then Profilt/Loss is calculated for each day and settled on same day ?
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  1. 5 lots is 5 x125 = 1250 , if you make Rs 2 profit per future that would mean profit of Rs 1250 x 2 = Rs 2500

  2. Once you have bought and sold, you have exited your contract, there is no obligation any more.

  3. Yes, if you don’t sell on same day, your position is marked to market. So whatever profit or loss for that day (based on closing price of the day) is either added or debited from your account.

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In additon to what Nithin told,

  1. You need to take into account brokerage also. it depends on your broker. So your profit will be Rs. 2500 - brokerage

  2. Yes, once bought and sold , you have exited your contract. Mostly of the people who get engaged in future, square off before expiry, it is very difficult process to get delivery. Some brokers even compulsorily ask traders to square off before expiry.

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Also when you square off the additional margin blocked from your account gets released and the final profits will reflect in your account.
Once you square off you are obligated to do nothing. You should know there is no delivery of shares concept at expiry day in India, all futures are cash settled.

Thanks Astroguru

5*125 = 625 , so profit should be 1250 right.

Thanks Nithin

Thanks trade100