It is possible to short index for as long as 6 month ???
Currently we have only 3 month far contracts in Nifty futures you can buy one 3 month far contract and on the day of expiry switch it’s position to another 3 month far contract.
Thanks bro … But how much charge to switch my existing short position for another 3 month??and how much % of margin it required??
Considerably low, it’s just transaction cost, see now to trade one Nifty futures contract on Zerodha it costs 180-220 rs including transaction both buy and sell. So you pay 200 once every 3 months and consider this, say if you trade far futures contract ,the cost of the contract, will be higher by 10-30 points at minimum. So that’s 1000-2000 more, farther the contract, higher the price compared to spot and compared to near expiry futures, due to low liquidity . so it’s better to keep shifting your position every month which will cost you 200 RS per month and if you r wrong exiting will b ez when liquidity is present or elz you will b at the mercy of the price quoted by the other person.
If I short nifty at cmp and my speculation is that nifty will correct up to 700 to 900 point by now but time will be more than 3 month let say 5 month and I wish to square off it so my net profit will be 700 -900 point right na…??
But if in between nifty will pull backed and go up 200 point by cmp then what happens to my margin ?? Because I m not willing to book loss and want to wait till 5 six month…my main doubt is that if at the time of switching of my position nifty is upp by say 100 point so am I suppose to switch the position at the rate of expiry day or it is possible to switch by just paying small charges you mentioned???
May be u understood my point…
Thanks in advance…
yeah if it pulls back you will have to book loss but if you are sure then of the short those 200 points will be an extra profit when the trend moves in your favour.