Nifty (S&P CNX Nifty) is the Index of Indian share market on NSE (National Stock exchange)
, just like the Sensex on BSE (Bombay Stock Exchange). The Nifty Futures movement is based on Nifty index.
Lot Size One Nifty Future Lot consists of 50 quantities of Nifty. Trading in Nifty Futures and Options has to be done in multiples of 50 Quantities (1 Lot size).
Expiry Each contract of Nifty Future and Nifty Option of a particular month expires on the last Thursday of that month. That is, traders have to square off their positions in that particular month on or before the Last Thursday of the month.
Trading Trading in nifty futures and Options is similar to trading in any Stock or Derivative. One needs a Demat account and then he can place orders to buy/ sell Nifty contract through his broker. There is a margin amount that is needed to buy 1 lot of Nifty Futures. The exact margin amount differs for different brokers, ranging from Rs. 25,000 to Rs. 40,000 for one lot. For Nifty Options, the amount required to buy 1 lot would depend upon the Premium of that particular option at that particular time. Depending upon whether one thinks that Nifty would go up or down, he can either decide to Buy or Sell a contract of Nifty Futures. If one thinks that the market can move down, he may Sell Nifty first and then Buy later at a lower price to make profit. This is unlike taking delivery of stocks, where one can only make money by Buying and hoping that the market moves up.