Why does many day traders trade stocks instead of futures . Is the lot size only reason for someone to trade intraday instead of futures .
Futures are there only on about 200 stocks, also one of the reason is it need more money to trade in futures as it has predefined lot sizes.
because it completes all the action within a day!
Apart from what @siva said, there are also other concerns:
- lack of liquidity in certain futures contracts
- entry and exit have to be done in the min lot size only. In other words, if the lot size is 1000 shares, you can not exit partially (e.g. 400 shares)
- Time to expiry is also a concern for swing trades because the contract expires by the end of the month.
@Prakhar_Agrawal : if you have good understanding with your broker ,you do not require to make any upfront margin payment for intra day but can settle finances by eod . however i have my doubts if any corporate brokerage house will give this facility to small investors . small broker where one to one discussion is possible, it is very much possible.
In cash market the chances are high that your order may get partially filled, specially if you’re trading 1k and above shares but in Futures there is nothing as such called partial fulfillment of the order since for some of the banking stocks the quantity per lot is usually higher take canbk, SBI, Indian Bank etc… Also you get higher leverage in the futures compared to cash market and honestly speaking if you got a right trade in futures you can mint money and same goes for wrong trade … You will incur substantial loss…