Index Futures


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Agreements to buy or sell a standardized value of a stock index, on a future date at a specified price. An investor can trade the ‘entire stock market’ by buying index futures instead of buying individual securities with the efficiency of a mutual fund.
The advantages of trading in Index Futures are:
-  The contracts are highly liquid
-  Index Futures provide higher leverage than any other stocks
 -  It requires low initial capital requirement
-  It has lower risk than buying and holding stocks
- It is just as easy to trade the short side as the long side
-  Only have to study one index instead of 100s of stocks



Friday, 02nd Oct 2015, 09:05:19 AM

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