College Days-2

Group theatre is the most amazing thing that I was regularly involved during my college days. I remember that I was in the third year of my college when I started going to Theatre club called “Nabin”. This club was situated in “Khagra” area of Berhampore. That place is a very well known place to me as that is place of my “Mamar Badi” (Uncle’s house). I will write about my mamar badi in a different post sometime in future as I had a quite a lot of memory associated with that… I was offering little tuition classes that days. And my connection with “Nabin” from one such tuition that I used to offer to “Maman” that area. Now, it just happened that Maman’s father was president of that club. And he first asked me to join group. I have an interest for Group theatre within myself that days and this was just the push I required. Now in those days it was always a group of friend’s affair in whatever we do. So I just asked Hillol to come with me and it seemed he has greater interest than me and he gleefully accept to come with me in the Group.

Our “Nabin” days were very memorable. I remember the first day when we felt awkward among the aged people around us. But after we found it was the only age which is different among us as thoughts were similar in most of us. And then we got gelled in the group as the days passing by.

We have participated in quite a few drama while our days in Nabin. The famous among them was the play where I have done a role of Goon in political drama based on the 71’s unrest situation of Bengal. I remember the name of the character also. “Mona” it called. It was a smash hit within our college group. Actually we had to sell a quite a lot tickets from out quota in college because that was place where we had hold and prominent presence. And after all we were in the third year and we were very much popular…especially among our juniors.......

College Days-1

I think I can't live a boring and routine life. I love to chat and pass time with my friends.... I think I love to do that from my college days only. I had a very good friend circle those days....We used to gathered at Diva's or Hilu's house. Our favorite time pass was to play cards. Playing cards in college days was a compulsory task for us... as much as taking semester exams in our engineering college. We used play cards hours without having food sometime...and when it was absolutely necessary for us to have food then only we take a break from play :)

We ran a little magazine during those days. I don't remember exactly who was actually behind this idea....but I must say it was a hit among us...we loved to participate in different activities starting from writing and collecting contents for the magazine to getting sponsors. Swarnendu...Priyanka and Hillol are the three best writers among us. I generally play the administrative part of running the little magazine...Samsaptak...this name was given by Anupam...Samsaptak was very close to our heart even though we had a tough time to sell the copies. I remember once we thought to publish a poetry written by all of our members. Everyone was asked to write at least four lines... I too did after a few full night of thinking...but the copy got out published...I found two lines out of my four has been modified in the final draft. After that I never tried to write any poetry.

Semester exams were a festival time for us second years onward.... As soon as the schedule of the exams were declared, our preparation then only starts.... First thing we need to do to get information of which all subjects are there in that particular semester....Even sometime, during exam only I came to know what is the name of the subject... we used to identify a paper by the suggestions we got from professors and First Girl...if the questions are known to us... of course :) Preparing for the exams includes collecting the suggestions and then answers of the suggested questions from the serious girls of the class... One amazing thing that happened to me is that I did not required any book in the full four years of college....I did only xerox :)

Pujo is coming...

A Vir Sanghvi article on Pujo and Bengalis, written a few yrs back in The Hindustan Times.

“It’s always hard to explain to somebody who does not live in Calcutta what it is about Puja that makes that period so magical.
Before I came to live in Calcutta in 1980, I was only dimly aware of the significance of Puja. I knew the boring facts and figures, of course. I knew what proportion of annual retail sales took place during the Puja period. I knew that the city shut down for the whole week. I knew that at ABP - where I was soon to work - telephone operators would, strangely enough, take the trouble of coming to work, only so that they could receive incoming calls, shout ‘Pujo’, and then hang up on irate out-of-town callers.

It’s like Christmas, they told me. Imagine Christmas in New York: Puja means that to a Bengali. Others found more home-grown parallels. It’s like Diwali in North India, they said. You know, the shopping, the parties, the festivities and all that stuff.

Actually, of course, it was nothing like Christmas; and certainly nothing like Diwali in North India.

Nothing, in fact, can prepare you for the magic of Puja in Calcutta.

To understand what it means, you have to be here.
As the years went on and as I went from Puja to Puja, I tried to work out why nobody could explain to outsiders what it was that made Puja so special. Why was that I failed as completely as everybody else in communicating the essence of Puja? Why did all the time-honoured comparisons not really ring true; with Dushera, Diwali, Christmas, Easter, Thanksgiving and God alone knows what else?

The answer, I suspect - and after all these years, it is still a suspicion, I have no solutions - is that you can’t understand Puja unless you understand Calcutta and unless you understand Bengalis.

But if you want a city with a soul: come to Calcutta.
When I look back on the years I’ve spent in Calcutta - and I come back so many times each year that I often feel I’ve never been away - I don’t remember the things that people remember about cities. When I think of London, I think of the vast open spaces of Hyde Park. When I think of New York, I think of the frenzy of Times Square. When I think of Tokyo, I think of the bright lights of Shinjiku. And when I think of Paris, I think of the Champs Elysee.

But when I think of Calcutta, I never think of any one place. I don’t focus on the greenery of the maidan, the beauty of the Victoria Memorial, the bustle of Burra Bazar or the splendour of the new Howrah ’Bridge’.

I think of people.
Because, finally, a city is more than bricks and mortars, street lights and tarred roads.
A city is the sum of its people.

And who can ever forget - or replicate - the people of Calcutta?

When I first came to live here, I was told that the city would grow on me. What nobody told me was that the city would change my life.
It was in Calcutta that I learnt about true warmth; about simple human decency; about love and friendship; about emotions and caring; about truth and honesty.
I learnt other things too. Coming from Bombay as I did, it was revelation to live in a city where people judged each other on the things that really mattered; where they recognized that being rich did not make you a better person - in fact, it might have the opposite effect.
I learnt also that if life is about more than just money, it is about the things that other cities ignore; about culture, about ideas, about art, and about passion.
In Bombay, a man with a relatively low income will salt some of it away for the day when he gets a stock market tip. In Calcutta, a man with exactly the same income will not know the difference between a debenture and a dividend. But he will spend his money on the things that matter. Each morning, he will read at least two newspapers and develop sharply etched views on the state of the world. Each evening, there will be fresh (ideally, fresh-water or river) fish on his table. His children will be encouraged to learn to dance or sing. His family will appreciate the power of poetry. And for him, religion and culture will be in inextricably bound together.
Ah religion!
Tell outsiders about the importance of Puja in Calcutta and they’ll scoff. Don’t be silly, they’ll say. Puja is a religious festival. And Bengal has voted for the CPM since 1977. How can godless Bengal be so hung up on a religions festival?
I never know how to explain them that to a Bengali, religion consists of much more than shouting Jai Shri Ram or pulling down somebody’s mosque. It has little to do with meaningless ritual or sinister political activity.

The essence of Puja is that all the passions of Bengal converge: emotion, culture, the love of life, the warmth of being together, the joy of celebration, the pride in artistic _expression and yes, the cult of the goddess.
It may be about religion. But is not about much more than just worship.
In which other part of India would small, not particularly well-off localities, vie with each other to produce the best pandals? Where else could puja pandals go beyond religion to draw inspiration from everything else? In the years I lived in Calcutta, the pandals featured Amitabh Bachchan, Princes Diana and even Saddam Hussain!
Where else would children cry with the sheer emotional power of Dashimi, upset that the Goddess had left their homes? Where else would the whole city gooseflesh when the dhakis first begin to beat their drums?
Which other Indian festival - in any part of the country - is so much about food, about going from one roadside stall to another, following your nose as it trails the smells of cooking?

To understand Puja, you must understand Calcutta. And to understand Calcutta, you must understand the Bengali.
It’s not easy. Certainly, you can’t do it till you come and live here, till you let Calcutta suffuse your being, invade your bloodstream and steal your soul.
But once you have, you’ll love Calcutta forever. Wherever you go, a bit of Calcutta will go with you.

I know, because it’s happened to me. And every Puja, I am overcome by the magic of Bengal.

It’s a feeling that’ll never go away.”

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Going to home

Going to home after a year, is something always very exciting. Last year we just planed and planned but nothing materialized. I hope this time it would be as per the plan and schedule. My wife is staying away from her parents for such a long time for the first time. So she must more excited than me. This time again I will attend the “Jamai Sosthi” at her house. This will my second time. Last year was my first time and I enjoyed the ceremony a lot. I hope I am not still old for them :) .... after all its only the second time.
Last year we had participated in a TV game named “Rojgera Ginni”. That game show actually is about husband-wife. My wife contacted with them and they had actually arranged the same in a quite a short notice. I must say she has quite a quality to do something if she decided and convinced.
After getting my job in Infosys when first time I returned home during Puja, I think that was the best “Returning Home” experience of mine. We were four people Me, Bap, Hilu and Avik. And I remember we had a great train journey. That time such was the excitement that the two and half a days of journey was not at all a boring one. I remember, as soon as I reached home I just had some food and went out of home with friends to visit Puja Mandaps. It was just like I returned home from my college and go out with my friends to have fun. But now all my friends at Berhampore are scattered everywhere for their job purpose and I know I won't able to find all of them whenever I will go to my birth place. Hence it is true that for me, the returning home thing is not any more that more attractive.
Now returning home means to me nostalgia of my house at Berhampore. And ofcourse the foods from my ma's kitchen. Also I would visit my neighbors. My ma gets very happy if give sometime to her to visit her neighbors. And to me it's a duty also because it's her neighbors only who used to take care of my parents when I have to leave in a place which is quite a distant from them.

हिन्दी ब्लोग्गिंग

इ मेरा पहला हिन्दी ब्लॉग हेई । अच्छा लगा के अब हम हमारी निजी भासा में भी ब्लॉग कर सक ते हेई। गूगल इ से पहले बही एईस तर के की सरे सुबिधइए दे चुके हेई। और इ सी लिए सयद गूगल दुनिएया में सबसे जयादा पोपुलर हेई। कभी कभी इंग्लिश में अपना चिंता को जाहिर करना थोरा मुल्स्किल हो जाता हेई। कु के आपनी मत्री भासा में कोइए भी बिचार लिखना हमेसा जायद आसान होता हेई।
अभिभादन देना चाहूँगा गूगल को इस के लिए।
पल्लब

IPL (Indian Premier League)

IPL definitely marks a new beginning of an era of cricket where games goes short-crisp and fast. This format is a huge hit at list this point of time and I think this will be the future of cricket. Now there was a lot of debate before the tournament starts or even after it got kicked off about the effect of this cricket "Tamasha" on the present forms of the game. I think this is not going to affect the test cricket which is the mother form of all. But definitely this will mark the end of the attraction of one day cricket. Simply because, one day format was made to make Cricket short from the test format but, now people have even less time to watch a full one-day game. So T20 is appropriate for the present generation. In the disadvantage front, I think this will erode out playing skill as T20 requires making run fast. Also T20 means a lot of cricket would be played now in the year. So players should be more cautious now so that they do not play in excessive matches in the lure of money. Yes, this money aspect is also going to affect cricket now. After the IPL auction of players, people were actually shocked to see how much money poured in cricket. This will no doubt make this sport even more popular. And the cricketers will surely get their due now. Even in the lighter note I think, parents now motivate their children to get into this sport more than the "study hard" stuff. So this generation of boys would have a better life than us for sure :) They will play more Crickets and get a good chance to make their carrier in cricket.

Straddle Fundas

Long straddle
An option payoff diagram for a long straddle position
An option payoff diagram for a long straddle position

A long straddle involves going long, purchasing, both a call option and a put option on some stock, interest rate, index or other underlying. The two options are bought at the same strike price and expire at the same time. The owner of a long straddle makes a profit if the underlying price moves a long way from the strike price, either above or below. Thus, an investor may take a long straddle position if he thinks the market is highly volatile, but does not know in which direction it is going to move. This position is a limited risk, since the most a purchaser may lose is the cost of both options. At the same time, there is unlimited profit potential, since the change of the underlying price of any option is unlimited.[1]

For example, company XYZ is set to release its quarterly financial results in two weeks. A trader believes that the release of these results will cause a large movement in the price of XYZ's stock, but does not know whether the price will go up or down. He can enter into a long straddle, where he gets a profit no matter which way the price of XYZ stock moves, if the price changes enough either way. If the price goes up enough, he uses the call option and ignores the put option. If the price goes down, he uses the put option and ignores the call option. If the price does not change enough, he loses.

Short straddle
An option payoff diagram for a short straddle position
An option payoff diagram for a short straddle position

A short straddle is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premiums of the put and call, but it is risky if the underlying security's price goes up or down much. The deal breaks even if the intrinsic value of the put or the call equals the sum of the premiums of the put and call. This strategy is called "nondirectional" because the short straddle profits when the underlying security changes little in price before the expiration of the straddle. The short straddle can also be classified as a credit spread because the sale of the short straddle results in a credit of the premiums of the put and call.

A short straddle position is highly risky, because the potential loss is unlimited, whereas profitability is limited to the premium gained by the initial sale of the options.

The collar

The Collar is a more conservative "opposite" that limits gains and losses.

As a volatility strategy

By engaging in a straddle transaction, the investor is also taking a position on the volatility of the underlying security. Going long a straddle is a bet that the underlier will be more volatile over the straddle's term than predicted by the market. Conversely, going short a straddle is a bet that the underlier will be less volatile. To see this, assume that the investor frequently re-hedges his portfolio with the underlier to keep his portfolio delta neutral. Because delta for an option is a monotonically increasing function of the underlier's price, one can quickly see that large underlier movements help the investor who is long a straddle. When the underlier's price goes up, the total delta of the straddle goes up as well, and the investor will need to sell the underlier to maintain a delta neutral portfolio. When the underlier goes down, the investor will need to buy the underlier. Hence, lots of movement in the underlier, or volatility, causes the investor to gain from his hedging transactions - he will always need to buy when the underlier is low and sell when high. In the same way, an investor with a short straddle will face the opposite situation - he will have to buy high and sell low when the underlier's price is moving. For investors with a view on the future volatility of a particular underlier, a straddle (or, for that matter, any option in general) can be a way to implement that view. Recently, the development of variance swaps allows investors to trade volatility directly without the need for constant delta hedging. For a further discussion of this style of investing, see volatility arbitrage.

Strangles

A strangle is an options strategy similar to a straddle, but with different strike prices on the call and put options. This is used to bias the profitability of the strategy towards one particular direction of price movement in the underlying, while still offering some (reduced) protection against a movement in the other direction.

For example, the trader in the example above might enter into a strangle if he believes that XYZ's financial statement will probably be positive, but he is not certain and still wants to hedge some of the risk of a negative statement (and is willing to pay for this privilege.)

Nick Leeson and the Barings Bank collapse

Nick Leeson took short straddle positions when chasing losses he had run up for his employer, Barings Bank. He had initially invested in futures on the Nikkei 225 stock index. Following a dramatic fall in the market, largely due to the Kobe earthquake, Leeson lost millions. He tried to re-coup these losses by investing in the higher risk, but potentially more rewarding, straddles. He bet that the Nikkei would stabilise and stay in a range around 19,000. His bet failed and losses escalated to $1.4bn, causing the bankruptcy of Barings.

Mirakeel---Bada Meiaa Chote Meiaa

I actually love whatever Mir does in the show. And that is why I usually stick to the my tv as soon as it's 9.30 PM on Monday-Tuesday-Wednesday these days. I must say the contestants are not any surprise this time except one or two this time. I really don't know why 'Dipanshu' does not come when some 3rd grade Bade Meiaas are there.

As a judge I think 'Srilekha' and 'Roni' are obvious choices. But, Sidhu a bit dull and boaring sometime when he is not actually singing on the show :)

Anyways I am not going to miss Mirakkel this season as well unless Zee Bangla goes of air in Pune.

Race-Full of Bollywood masalas

Race is a nice thriller from Aabas-Mastan kitty. Although there are hardly any new thing except the old and trusted Bollywood masalas but I would say that this is well put together. The action and the twists sequences are well placed in the movie. Songs are well fast tracks in line with an action-thriller. But, Pritam disappoints when I came to know there are plagiarisms in the songs' compositions.

To me Saif and Bipasa are the best of the lot. Katirina is really looking sizzling in the movie. But, I must say she really has to learn some acting to stay longer here. Akhshay Khanna was a bit diminished. He seems to me a bit overdoing with his acting this time. All in all, it is a full pasia-wasul movie and really good time pass on a lazy saturday.

Future and Option Trading

In recent correction of Stock Market those who blooded most are Future and Option traders. I have recently stared FnO trading and here I am jotting down some learning for Option Trading:

Don’t speculate about the movement of the market as when you are speculating then actually you are doing wrong judgment for sure.

Look for specific and authentic news which will affect the stock market index and validate whether they are affecting the stock market index.

You can not do precise buying and selling anytime as simply you can’t know the future. So don’t mind if you buy at slightly higher price or sell at a lower price.

Don’t stick to a loss making deal. You can’t be a winner always. If you see that it’s gonna be loss then don’t wait for things to be change and good again. It’s always good to book a less loss than a greater loss.

Book profit as unless and until you book your profit you money is stuck in the market. There is no significance of unrealized profit.

Square off your open position of a day on that same day itself. As in volatile market you never know what will happen tomorrow and when the domestic market is heavily dependent on the world market cues.

Be extra cautions about the open positions and value of a contract when the expiry date arrives.

Stock Market Fundas

Understanding Price to Earnings Ratio

If there is one number that people look at than more any other it is the Price to Earnings Ratio (P/E). The P/E is one of those numbers that investors throw around with great authority as if it told the whole story. Of course, it doesn’t tell the whole story (if it did, we wouldn’t need all the other numbers.)

The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular metric of stock analysis, although it is far from the only one you should consider.

You calculate the P/E by taking the share price and dividing it by the company’s EPS.

P/E = Stock Price / EPS

For example, a company with a share price of $40 and an EPS of 8 would have a P/E of 5 ($40 / 8 = 5).

What does P/E tell you? The P/E gives you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings. Some investors read a high P/E as an overpriced stock and that may be the case, however it can also indicate the market has high hopes for this stock’s future and has bid up the price.

Conversely, a low P/E may indicate a “vote of no confidence” by the market or it could mean this is a sleeper that the market has overlooked. Known as value stocks, many investors made their fortunes spotting these “diamonds in the rough” before the rest of the market discovered their true worth.

What is the “right” P/E? There is no correct answer to this question, because part of the answer depends on your willingness to pay for earnings. The more you are willing to pay, which means you believe the company has good long term prospects over and above its current position, the higher the “right” P/E is for that particular stock in your decision-making process. Another investor may not see the same value and think your “right” P/E is all wrong.

Understanding Earnings Per Share

One of the challenges of evaluating stocks is establishing an “apples to apples” comparison. What I mean by this is setting up a comparison that is meaningful so that the results help you make an investment decision.

Comparing the price of two stocks is meaningless as I point out in my article “Why Per-Share Price is Not Important.”

Similarly, comparing the earnings of one company to another really doesn’t make any sense, if you think about it. Using the raw numbers ignores the fact that the two companies undoubtedly have a different number of outstanding shares.

For example, companies A and B both earn $100, but company A has 10 shares outstanding, while company B has 50 shares outstanding. Which company’s stock do you want to own?

It makes more sense to look at earnings per share (EPS) for use as a comparison tool.

You calculate earnings per share by taking the net earnings and divide by the outstanding shares.

EPS = Net Earnings / Outstanding Shares

Using our example above, Company A had earnings of $100 and 10 shares outstanding, which equals an EPS of 10 ($100 / 10 = 10). Company B had earnings of $100 and 50 shares outstanding, which equals an EPS of 2 ($100 / 50 = 2).

So, you should go buy Company A with an EPS of 10, right? Maybe, but not just on the basis of its EPS. The EPS is helpful in comparing one company to another, assuming they are in the same industry, but it doesn’t tell you whether it’s a good stock to buy or what the market thinks of it. For that information, we need to look at some ratios.

Before we move on, you should note that there are three types of EPS numbers:

* Trailing EPS – last year’s numbers and the only actual EPS

* Current EPS – this year’s numbers, which are still projections

* Forward EPS – future numbers, which are obviously projections

Market Cap is the True Measure of a Company's Value

Why is a stock that cost $50 cheaper than another stock priced at $10?

This question opens a point that often trips up beginning investors: The per-share price of a stock is thought to convey some sense of value relative to other stocks. Nothing could be farther from the truth.

In fact, except for its use in some calculations, the per-share price is virtually meaningless to investors doing fundamental analysis. If you follow the technical analysis route to stock selection, it’s a different story, but for now let’s stick with fundamental analysis.

The reason we aren’t concerned with per-share price is that it is always changing and, since each company has a different number of outstanding shares, it doesn’t give us a clue to the value of the company.

For that number, we need the market capitalization or market cap number.

The market cap is found by multiplying the per-share price times the total number of outstanding shares. This number gives you the total value of the company or stated another way, what it would cost to buy the whole company on the open market.

Here’s an example:

Stock price: $50

Outstanding shares: 50 million

Market cap: $50 x 50,000,000 = $2.5 billion

To prove our opening sentence, look at this second example:

Stock price: $10

Outstanding shares: 300 million

Market cap: $10 x 300,000,000 = $3 billion

This is how you should look at these two companies for evaluation purposes. Their per-share prices tell you nothing by themselves.

What does market cap tell you?

First, it gives you a starting place for evaluation. When looking a stock, it should always be in a context. How does the company compare to others of a similar size in the same industry?

The market generally classifies stocks into three categories:

* Small Cap under $1 billion

* Mid Cap $1 - $10 billion

* Large Cap $10 billion plus

Some analysts use different numbers and others add micro caps and mega caps, however the important point is to understand the value of comparing companies of similar size during your evaluation.

You will also use market cap in your screens when looking for a certain size company to balance your portfolio.

Conclusion

Don’t get hung up on the per-share price of a stock when making your evaluation. It really doesn’t tell you much. Focus instead on the market cap to get a picture of the company’s value in the market place.

Trading in Futures Derivatives (F&O)

Idea about futures derivatives
Future trading can be done on stocks as well as on Indices like IT index, Auto index, Pharma index etc

Stock future trading -
Let’s first understand what the meaning of futures trading is. In simple language one future contract is group of stocks (one lot) which has to be bought with certain expiry period and has to be sold (squared off) within that expiry period.
Suppose if you buy futures of Wipro of one month expiry then you have to sell it within that one month period.
Important - Future contract get expires at every last Thursday of every month.

If you buy October month expiry future contract then you have to sell it within last Thursday of October month. Likewise you can buy two months and three months expiry period future contract.
You can buy maximum of three month expiry period.
For example - suppose this is month of October then you have to buy till maximum month of December expiry and you have to sell it within last Thursday of December month. You can sell anytime between these periods.
Lot size (group of stocks in one future contract) varies from future to future contract.
For example Reliance Industries future lot size has 150 quantities of shares while a Tata Consultancy service has 250 shares.
In the same manner all futures have different lot sizes decided by SEBI (Securities Exchange Board of India).
The margin (in other words price of one lot size) varies on daily basis based on its stocks closing price.
Future trading can be done on selected stocks listed under Nifty and Jr. Nifty and not on all stocks.
The price of future contract is determined by its underlying stock.
Important - You can’t buy future contract of expiry period of not more than 3 months.

Indices future trading
As you can do future trading on stocks likewise you can do trading on different indices like Nifty index, IT index, Auto index, Pharma index etc.

Successful trading in futures
Future or derivative trading is the process of buying or selling stock future or index future for a certain period of time and squaring off before the expiry date.
Expiry period can be of one month, two month and three month and not more then of three month.
Its not compulsion that you have to square off your positions on the expiry date or wait till the expiry period but in fact you can square off at any time even, at the same day, or you can hold as long as you want but remember to square off before expiry date.
Most of the times on 3rd month expiry future you may see very less trading volumes.
Generally most of the traders/investors trade or invest on current month future or second month future contract and you may see very low volumes on last month means third month expiry .
But on Nifty index contract or on other index contract you may see good trading volumes even on 3rd month expiry future also.
You can also buy and sell or sell and buy future contract on the same day of any expiry month. This is called as day trading or intraday in futures.
Selling future contract before buying is called short selling. Short selling is allowed in futures trading.

Major Advantages of Futures Trading over Stock Trading

1) Margin is available -
In future trading you get margin to buy (but can hold only up to maximum of 3 months), while in stock trading you
must have that much of amount in your account to buy.
For example - If you plan to buy stock XYZ at Rs. 100 and quantity 1000 shares then you have to pay 1 lakh
rupees (RS 100 x1000 qty). But if you plan to buy XYZ future contract and that contract lot size has 1000 quantity
of shares then instead of paying 1 lakh rupees you have to pay just 20% to 30% of whole amount which comes to
20 thousand to 30 thousand rupees.
In short in future trading you have to pay just 20% to 30% of the whole amount what you pay if you buy stock of
that price. But limitation for this is your expiry period. Means if you bought future of one month expiry then you
have to square off within that one month likewise you can buy maximum of three months expiry.

2) Possible to do short selling -
You can short sell futures- You can sell futures without buying them which is called short selling and later buy within
your expiry period, to cover up your positions.
This is not possible in stocks. You can’t sell stocks before buying them in delivery (you can do in intraday). You can
short sell futures and can cover off within your expiry period.
For example - If expiry period of your future contract is of 1 month then you have time frame of one month to cover off
your order like wise if your future expiry period is of two months then you have time frame of two months and this
continues till three months and not more then three months.
In short selling of futures also you get margin as you get in buying of futures.

3) Brokerages are low -
Brokerages offered for future trading are less as compared to stock delivery trading.
Disadvantages of Future Trading over Stock Trading

1) Limitation on holding -
If you buy or sell a future contract then you have limitation of time frame to square off your position before expiry
date.
For example - If you buy or sell future contract of one month expiry period then you have to square off your position
before your expiry date of that month, so in this example you got one month period. So likewise if you go for two
month expiry period then you get 2 months and if you go for three month expiry then you will get 3 month expiry
period to square off your position.

2) Level of Risk -
Due to margin facility in future trading you may earn huge profit by investing fewer amounts but at the contrary side
if your trade goes wrong then you may have to suffer huge loss.

3) Limitation on stocks -
You can’t do future trading on all stocks. You can only do on listed stocks on Nifty and Jr. Nifty.

Important points to Remember while doing future trading
1) First up all you have to decide whether you want to buy stock derivatives or index derivative. After this you have to
select the expiry period. Once you buy certain expiry period then you have to sell (cover off) your order before that
period.
Its no need to wait till the expiry period, you can even square off on the same day (if you are getting profit) or
anytime whenever you feel to book profit, no compulsion to cover off your order on the last day of expiry.
2) Check out for Futures current market price.
3) Futures Lot Size (number of shares in that particular Lot).
4) Futures Lot price (this is the amount you must have in your account to buy one lot of future) also called as margin
amount.
5) Selection of expiry period - you want to trade on expiry of one month, two month or last 3rd month.
6) No need to wait till expiry period can book profit wherever applicable.

Method of Short Selling
Short selling (selling before buying in future trading)
In future trading you can do short selling and buy (cover) later when price comes down from your selling price you can short sell stock future as well as index future. But again same restriction will apply and that is of expiry period.