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What is the meaning fno segment in nse share market ?
FNO SEGMENT means futures contract or forward contract, which is traded on NSE Stock Exchange on individual stocks from November 9, 2001.
HOW MANY SCRIPS ARE AVAILABLE IN FNO SEGMENT?
The futures contracts are available on 215 STOCKS stipulated by the Securities & Exchange Board of India (SEBI). For More Details of Current Fno Scrips in nse
WHAT IS MARKET LOT?
LOT SIZE refers to number of underlying securities in one contract. The lot size is determined keeping in mind the minimum contract size requirement at the time of introduction of derivative contracts on a particular underlying.
For example,
If shares of RELIANCE IND Ltd are quoted at Rs. 1000 each and the minimum contract size is Rs.2 lacs, then the lot size for that particular scripts stands to be 200000/1000 = 200 shares i.e. one contract in RELIANCE IND LTD covers 200 shares.
HOW TO CALCUTE EXPIRY DATE?
Futures contracts expire on the last Thursday of the expiry month. If the last Thursday is a trading holiday, the contracts expire on the previous trading day.
WHAT IS THE PERIOD OF FNO SEGMENT?
Futures contracts have a maximum of 3 month trading cycle:
(1) The near month (suppose near month January)
(2) The next month (Next month is February)
(3) The far month (Far month is March)
A new contract is introduced on the trading day following the expiry of the near month contract.
There will be 3 contracts available for trading in the market i.e., First near month, Second next (mid) month and Third far month duration respectively.
WHAT IS THE VALUE OF CONTRACT?
The value of the Futures Contracts on individual securities may not be less than Rs. 2 lakhs at the time of introduction for the first time at any Stock Exchange. The permitted lot size for futures contracts & options contracts shall be the same for a given underlying or such lot size as may be stipulated by the Stock Exchange from time to time.
BASE PRICES
Base price of futures contracts on the first day of trading (i.e. on introduction) would be the theoretical futures price. The base price of the contracts on subsequent trading days would be the daily settlement price of the futures contracts.
IF I WANT TO BUY 1 LOT, HOW MUCH SHOULD I PAY?
The Margin of the is decided By the NSE Stock Exchange its depends upon stock. If there is a high volatility in the stock you have pay higher margin generally you have to 15 to 20 % margin of Total contract value.
Example:
Stock name: RELIANCE IND
LOT SIZE: 500 SHARES
Market Price: 700
Total Value of Contract: Rs.3, 50,000
Margin Payable ( 20% of 3,50,000 ) : Rest. 70,000
Buying date: 29th June 2012 (1st day of July. fno settlement)
(Expiry date of july. settlement is 26th july . 2012)
So you can buy 500 shares of Reliance Ind in just Rs. 70,000 for the period of 29th June 2012 to 26 th July 2012. You have to sell these 500 share before or 26th July 2012 or else NSE will hold your position with closing rate of 26th July 2012.
What Is The Advantage Of Fno Segment?
1) You Can Trade In Qty With Low Capital.
2) You Can Keep Your Position For One Month Period.
3) You Can Trade With Low Brokerage.
4) You Can Short Sell In nse Fno Segment.
What Is Disadvantage Of nse Fno Segment?
1) If Market Goes Down Suddenly And If You Dont Have Extra Margin Money, Nse Will Squareup Your Position And You Have To Book Loss.
2) There Are The Chances Of Over Trade.
Market type : N
Instrument Type : FUTSTK
Underlying : Symbol of underlying security
Expiry date : Date of contract expiry
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