I see some traders are using futures charts over spot chart. For eg: nifty option trading uses futures chart. If the volume is the criteria for using futures chart, then there is one more question, is the volume data showing on the future chart, is it the particular future contracts traded volume, right?
So how the futures contracts volume give info about the underlying.
Futures and options are derivative of an underlying. So how that possible?
If we need to monitor the index (nifty 50) volume data, then that will be the sum of 50 stocks volume.
Few people trade options using futures charts because option price changes based on future price, anyhow on expiry day, close to expiry future will be same as spot but till then options track futures and not spot.
Futures volume tells of number of contracts traded on that particular fut contract only, nothing to do with spot.
Yes, you are. Adding volume of all nifty stocks won’t say anything, also few shares will have lower absolute value and so more number of it will be traded and that doesn’t mean Nifty is having higher volume.
People check futures charts for various reasons, to know if it is trading at premium or discount to spot, or to see how volume and Open interest is changing compared to price change etc.
Seems you are new to fno, I would recommend you to go through fno module on varsity before trading fno. Check this.