Liquidity in Future

General
1

Hello experts -

I am interested in getting into Futures market but would like to know -

1 - how is the liquidity of stocks in future market as compared to cash market ?

2 - in Kite, the charts on for futures stock is for very limited days / weeks and not like cash market stock charts for previous year. Why is that so ? OR how to look for charts for longer durations ?

Thanks.

2

Hi,

  1. Futures market has more liquidity as compared to the cash market. This is attributed to Futures being traded in lot sizes as a result of which every trade has a minimum volume. This, by default, increases the volume traded which increases liquidity. The motive of good liquidity is to be able to square off a position at as close to market price and to also be able to trade these positions in higher quantities. This is ensured by the larger number of buyers and sellers who participate in the futures market and also curtails drastic fluctuation in Futures prices.

  2. A Futures contract lasts 3 months. So, for any futures chart, the maximum chart data available will be for 3 months after which the Futures contract expires.