What is Nifty Futures?
A contract in futures is an agreement between two parties regarding the sale and purchase of shares of a company at a future time. The intriguing part of the deal is that although the share will change hands in the future the price between the two parties is arrived at in the present. The day the shares will change ownership is called the delivery date.
The buyer in case expects the price of the share to rise in the future, while the seller feels that the share will fall in the days leading to the delivery date. In case both are speculating on making a profit on the price they have settled in the present. In case the buyer has a long position while the seller has a short position. The trade can be done in shares as well as commodities.
A big aspect of understanding that “what are nifty futures” is defined as the National Stock Exchange is the intermediary in this contract. This is enforced through margin money kept with the NSE on behalf of both the buyer and seller. Daily fluctuations make a profit for one person and a loss for the other person. The difference is credited to the account of the person making the profit. In this way, the accounts are maintained in a regular way till the delivery date.