Facts of future trading by Financial Advisor in South Delhi

1. Facts of future trading by Financial Advisor in South Delhi A Derivative market is famous for trading after an introduction of a derivative in the year of 2000 in India. Derivatives are the values of underlying assets driven by financial contracts; it may be stocks, currencies, indices, commodities and exchange rates. Derivative market is trading in future and option. Financial Advisor in South Delhi discuss the forward dealing, it was the base of futures. Future market is the update version of the forward, A forward investment was the oldest derivative and both dealings follows the same transactional structure. Nowadays futures are mostly using by traders and a forward dealing is only executed by banks and industries. Forward is traded only in the OTC- over the Counter, An agreement. Here, both parties (buyer, seller) enter into an agreement to exchange the goods or derivative in terms of cash with a specific price and future date .the time and date of delivery is fixed by both the party with no involvement of the third party. Negotiation is done on one to one basis. But nothing is perfect in this world, Forward investments also have some limitations or risks like Liquidity Risk, Default/counter Risk, Regulatory Risk and Rigidly all these risks faced by a trader which is overcome by Future Market. The first future trading is held in agriculture commodity in 1972 and now it is trading in natural resources. A Future market is a place where both parties (buyer, seller) dealing on derivative agreed on a price and future delivery date with future payment. The Best Mutual Funds Advisor South Delhi is a standardized forward contract and negotiated at future exchanges. To reduce a risk of counter-party walk away if the price goes against them, with mutual consent both parties involve the third party on lodging with a margin amount/token/premium which is in percentage value of the contract. Here trading is done in Lots,(which is pre-defined in the contract, it is the minimum quantity of trading derivatives) within the time before the expiry date of the contract is fixed. Hedgers and Speculators are the two kinds of future traders. Hedgers do not usually seek a profit by dealing in commodities but rather seek to stabilize the revenues or cost of their business operation. Their gains or losses are usually offset to some degree by a corresponding loss or gain in the market for the underlying physical commodity. Speculators are essentially placed bets on the future prices of certain commodities and are not interested in taking possession of the underlying assets. Again talk about above example, if you disagree with the consensus that wheat prices are going to fall, you might buy a future contract. If your prediction is right

2. and wheat prices increases, you could make money by selling the futures before it expires. These traders are often blamed for big price swing, but they also provide a lot of liquidity to the futures contract. For dealing in the futures investments you have a tremendous amount of skill, knowledge and risk tolerance. They require daily settlement, meaning that if the future contract bought on margin is out of the money on a given day, the contract holder must settle the shortfall that day.