{"id":21132,"date":"2022-03-08T14:29:35","date_gmt":"2022-03-08T14:29:35","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=21132"},"modified":"2022-10-27T13:08:42","modified_gmt":"2022-10-27T13:08:42","slug":"trading-strategies-in-stock-futures","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/trading-strategies-in-stock-futures\/","title":{"rendered":"Understanding Trading Strategies In Stock Futures"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"21132\" class=\"elementor elementor-21132\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-23ba90b elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"23ba90b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b6a6f9f\" data-id=\"b6a6f9f\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-e0f864e elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"e0f864e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-wide\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-7efb245 chapters_list\" data-id=\"7efb245\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-33d4575 elementor-widget elementor-widget-shortcode\" data-id=\"33d4575\" data-element_type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery(\"#post_chapters a[href*='\" + location.pathname + \"']\").addClass(\"current\");\n\t\t})\n\t<\/script>\n\t<div class=\"desktop_chapters\"><div id=\"post_chapters\"><div class=\"post_chapters-heading\">Chapters<\/div><ul><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/introduction-to-derivatives\/\">Introduction To Derivatives<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/derivatives-market\/\">Derivatives Market<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/forwards-contract\/\">Forwards Contract<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/futures-contract\/\">Futures Contract<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/trading-strategies-in-stock-futures\/\">Trading Strategies In Stock Futures<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/pricing-of-futures-contract\/\">Pricing of Futures Contract<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/options\/\">Options<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/swaps\/\">Swaps<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/understanding-margins\/\">Understanding Margins<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/open-interest\/\">Open Interest<\/a><\/li><\/ul><\/div><\/div><div class=\"chapters_toggle\" title=\"chapters\"><a title=\"chapters\" href=\"#\" id=\"open_chapters\"><span>View Chapters<\/span>&nbsp;&nbsp;&nbsp;<i class=\"fa fa-chevron-right\"><\/i><\/a><a title=\"chapters\" href=\"#\" id=\"close_chapters\" style=\"display:none;\"><span>Hide Chapters<\/span>&nbsp;&nbsp;&nbsp;<i class=\"fa fa-chevron-right\"><\/i><\/a><\/div>\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery('.chapters_toggle 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class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-90f6d06 market_content_tabs elementor-widget elementor-widget-eael-adv-tabs\" data-id=\"90f6d06\" data-element_type=\"widget\" data-widget_type=\"eael-adv-tabs.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t        <div data-scroll-on-click=\"no\" data-scroll-speed=\"300\" id=\"eael-advance-tabs-90f6d06\" class=\"eael-advance-tabs eael-tabs-horizontal eael-tab-auto-active \" data-tabid=\"90f6d06\">\n            <div class=\"eael-tabs-nav\">\n                <ul class=\"eael-tab-inline-icon\" role=\"tablist\">\n                                            <li id=\"study\" class=\"active-default eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"true\" data-tab=\"1\" role=\"tab\" tabindex=\"0\" aria-controls=\"study-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-edit\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Study<\/span>                            \n                                                    <\/li>\n                                            <li id=\"slides\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"2\" role=\"tab\" tabindex=\"-1\" aria-controls=\"slides-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"fas fa-book-open\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Slides<\/span>                            \n                                                    <\/li>\n                                            <li id=\"videos\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"3\" role=\"tab\" tabindex=\"-1\" aria-controls=\"videos-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-eye\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Videos<\/span>                            \n                                                    <\/li>\n                                    <\/ul>\n            <\/div>\n            \n            <div class=\"eael-tabs-content\">\n\t\t        \n                    <div id=\"study-tab\" class=\"clearfix eael-tab-content-item active-default\" data-title-link=\"study-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='Going-Long' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>5.1 Going Long<\/strong><\/h2>\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-63968 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long.png\" alt=\"Going Long\" width=\"886\" height=\"920\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long.png 886w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long-289x300.png 289w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long-768x797.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long-48x50.png 48w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long-96x100.png 96w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Long-150x156.png 150w\" sizes=\"(max-width: 886px) 100vw, 886px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>Going long &#8211; buying a futures contract &#8211;\u00a0 is the most basic futures trading strategy. An investor buys a futures contract expecting the contract to rise in price by expiration.<\/p>\r\n<p><strong>Best to use when: <\/strong>Buying a futures contract is the most straightforward futures trading strategy for speculating on an asset rising before the contract expires. The futures contract offers a leveraged return on the underlying asset&#8217;s rise, so the trader expects a clear move higher in the near future.<\/p>\r\n<p><strong>Example of a long position- <\/strong>A\u00a0<strong>long futures <\/strong>means a <strong>buy position <\/strong>which is due or unsettled as on a particular trade date. For e.g.: suppose X buys 5 Futures contracts on Stock A, then he is stated to have long position on 10 such contracts through which he is able to purchase stock A as per the lot size of the contract.<\/p>\r\n<p>Stock A futures trade at Rs. 350, and you decide to buy 5 contracts of the stock, each containing 1,000 shares. Your broker allows you to have initial margin of 10% on each contract (i.e Rs.35000) and Rs.7000 in maintenance margin. In total, the contracts cost Rs.17.5lk (5* 350 * 1000), but you&#8217;ll need only Rs.1.75lk in equity to open the position and Rs.7000 in maintenance margin.<\/p>\r\n<p><img decoding=\"async\" class=\"size-full wp-image-21087 aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Long-Position-Profit.png\" alt=\"\" width=\"688\" height=\"255\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Long-Position-Profit.png 688w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Long-Position-Profit-300x111.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Long-Position-Profit-150x56.png 150w\" sizes=\"(max-width: 688px) 100vw, 688px\" \/><\/p>\r\n<p><strong>Risks and rewards:<\/strong> Going long offers the inherent promise of the futures contract: a leveraged return on the underlying asset&#8217;s rise. It has uncapped upside as long as the asset rises, making this futures trading strategy a potential home run.<\/p>\r\n<p>Going long also exposes you to leveraged downside. If the underlying asset falls in value, it hits the long futures contract just as hard, and the investor might have to put up more money to hold the position.<\/p><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='Going-Short' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>5.2 Going Short<\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-63967 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short.png\" alt=\"Going Short\" width=\"969\" height=\"597\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short.png 969w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short-300x185.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short-768x473.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short-50x31.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short-100x62.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Going-Short-150x92.png 150w\" sizes=\"(max-width: 969px) 100vw, 969px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>Going short-selling a futures contract &#8211; is the flip side of going long. An investor sells a futures contract expecting the contract to fall by expiration.<br \/><strong>Best to use when:<\/strong> Selling a futures contract is another straightforward futures trading strategy, but it can be riskier than going long because of the potential for uncapped losses if the underlying asset continues to rise. Investors going short on a contract want the full leveraged returns of an asset that is expected to fall.<br \/>Example of going short: In the above example- short position profit would be<\/p>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-21088 aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Short-Position-Profit.png\" alt=\"\" width=\"670\" height=\"283\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Short-Position-Profit.png 670w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Short-Position-Profit-300x127.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/03\/Short-Position-Profit-150x63.png 150w\" sizes=\"(max-width: 670px) 100vw, 670px\" \/><\/p>\r\n<p>Risks and rewards: Going short offers many of the same benefits that going long does, most notably the leveraged return on the underlying asset&#8217;s decline. However, unlike the long position, going short has uncapped downside. Going short exposes you to leveraged upside when the underlying asset falls. But your upside is capped since the underlying asset cannot fall below Rs. 0. In other words, the most you could make on the short contract is the total value of the short position, which is Rs.17.5lk in this example.<\/p><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tvar resize_21086 = jQuery('.owl-carousel');\n\t\tresize_21086.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"slides-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"slides-tab\">\n\t\t\t\t        <p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-11528 aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png\" alt=\"\" width=\"612\" height=\"408\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png 612w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview-300x200.png 300w\" sizes=\"(max-width: 612px) 100vw, 612px\" \/><\/p>                    <\/div>\n\t\t        \n                    <div id=\"videos-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"videos-tab\">\n\t\t\t\t        <p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-11528 size-full\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png\" alt=\"\" width=\"612\" height=\"408\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png 612w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview-300x200.png 300w\" sizes=\"(max-width: 612px) 100vw, 612px\" \/><\/p>                    <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 5.1 Going Long Going long \u00e2\u20ac\u201d buying a futures contract \u00e2\u20ac\u201d is the most basic futures trading strategy. An investor buys a futures contract expecting the contract to rise in price by expiration. Best to use when: Buying a futures contract is the most straightforward futures trading strategy for speculating on an &#8230; <a title=\"Understanding Trading Strategies In Stock Futures\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/equity-derivatives-course\/trading-strategies-in-stock-futures\/\" aria-label=\"Read more about Understanding Trading Strategies In Stock Futures\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":21115,"menu_order":5,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-21132","markets","type-markets","status-publish","format-standard","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/21132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=21132"}],"version-history":[{"count":9,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/21132\/revisions"}],"predecessor-version":[{"id":31946,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/21132\/revisions\/31946"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/21115"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=21132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=21132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}