What is the Nifty Future and How to Trade it?

What is the Nifty Future and How to Trade it? Gill Broking

Nifty Future is a derivative instrument based on the National Stock Exchange’s index Nifty. Since this instrument derives its value solely from the index’s market value, it is known as a pure derivative type instrument. The Nifty Future can be traded in the form of contracts that dictate a transaction on a future date at predetermined prices. Due to its stability and a higher probability of earning profits, Nifty Future has become a popular instrument of choice among traders. 


Nifty Futures are future instruments attached with the NSE-50’s index Nifty. The prices for

Nifty Future contracts are solely bound to the Nifty index on the national stock exchange and hence this contract is of a pure derivative type. Like all indices in the National Stock Exchange, the prices of this index vary according to market conditions. Nifty futures are considered to be highly rewarding in terms of investment, especially for intraday trading.

How to trade in Nifty Future?

To be able to trade in Nifty Future at the stock exchange, you will need to get a trading account opened with a registered stockbroker. To do this, you should take into account the brokerage fees being charged by different brokers, annual maintenance fees, and the trade margins like SPAN and exposure margins. Also, you will need to open a Demat account and get it linked to your trading account. Once you are through with these steps, as an intelligent trader you should always weigh out the pros and cons before making any transaction. Similarly, you need to perform an informed analysis of the stock market before getting yourself a Nifty Future position.  

The first step would be to set aside the amount that you are willing to risk in the market. Like all other assets listed on the stock exchange, the Nifty index is prone to market risks too and you should never enter a contract that may lead you to lose an amount that is more than you can afford. So, it is important to set your financial goals in stone first. 

The next step is to place a trade order. You can either buy or sell a certain amount of indices. If it is your first transaction, the first step would be to buy the indices. You can directly go to the brokerage firm’s portal and place your order to buy or sell via your trading account. Here, you can specify the units of indices that you want to buy or sell. Then the order will be placed with your depository participant. The DP will check in the stock exchange and confirm if your order can be accepted. Once accepted, the specified amount will be deducted or credited to your Demat account based on the type of transaction. 

A holding statement will be generated too wherein you can see and track your positions and all the transactions that have been done via your account. This statement helps you report any discrepancy in your order and curb any inconsistencies.

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

Names and contact details of all Key Managerial Personnel including Compliance Officer

Sr. No.Name of the IndividualDesignationContact NumbersEmail Id
1 Charanpreet GillCEO/MD011-40345555admin@gillbroking.com
2 Charanpreet GillWhole Time Director011-40345555gillbroking@gmail.com
3 Charanpreet GillCompliance officer011-40345555compliance@gillbroking.com
4Manpriya GillDesignated Director-1011-40345555manngill04@gmail.com
5Kewal GillDesignated Director-2011-40345555fvwealth@gmail.com

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