Futures Trading Made Easy: Future & Options Trading Course

When you talk about markets, you must know that risk & return are directly related to each other. The higher the return, the higher the risk associated with it & vice versa. So if you are someone expecting higher returns & are ready to take higher risk, trading in Futures & Options is something you may be looking for.

What makes Future trading different is the extent of leverage of margin that you get, which may not be available in the case of stocks. If you are able to make the most out of the exposure you get in the futures market, you will surely make gains.

Apart from risk-return, you must also be very clear about the fundamental concepts, technical charts & patterns, market movements, trading strategies etc. So it is very important to learn futures & options.

You should remember that as much as you can benefit from the upside, as much or even more can be the loss from the downside. To gain this understanding of how to make the most of the upside & how to minimize the effect of the downside on your trades, you must learn futures and options trading.

Please find below the topics overview of the Futures Trading Made Easy: Future and Option Trading Course:

Topic 1: Introduction to Derivatives

• You will first delve into the intricate world of financial derivatives. Using Gold as an example, you will thoroughly understand the derivatives market in this section.
• Explore several situations to understand the implications of this contract for the buyer and seller. 
• Learn about its types, including Futures, Forwards, Swaps and Options.

Topic 2: Understanding Forward Contracts

• You will now understand what forward contracts are. 
• Understand the advantages of forward contracts using a real-world scenario involving a wheat farmer and an FMCG firm.
• Look at the limits of forward contracts, such as their customisation, lack of regulation, and counterparty default risk. 
• Compare Over the Counter (OTC) instruments to standardised, exchange-traded goods like futures.
• Learn the liquidity issues associated with OTC instruments.

Topic 3: Basics of Futures Contracts

• In this topic, you will understand the concept of futures contracts and how they differ from forward contracts. 
• Understand the structure of organised and regulated futures trading. 
• Explore the difference between buying or selling futures contracts and buying or selling stocks directly. 
• Explore the unique characteristics of futures trading compared to traditional equities investing. 

Topic 4: Futures Terminologies

• You will now look at key terminologies related to futures contracts, using examples from the NSE website. 
• Gain knowledge of the various types of instruments, their expiry dates, the underlying values, the lot sizes, the open interest, and the basis (the price difference between futures and spot). 

Topic 5: Margin & Mark-to-market

• You will now delve into the concept of margin and mark-to-market.
• Discover how the margin money is blocked in the trading account and how margin needs are calculated depending on prospective losses. 
• Understand the concepts of exposure margin, span margin, and the impact of margin calls. 
• See how daily profits and losses are calculated for open futures positions based on price movements using a hypothetical situation. 

Topic 6: Delivery and Settlement: 

• Here, you will look at how to exit long positions in the futures. 
• Understand cash settlement and daily mark-to-market adjustments for index futures and physical delivery.
• Understand the implications of increased margin requirements for stock futures.

Topic 7: Payoff and Leverage

• Understanding the risks and rewards before entering into such contracts is essential for beginners. Here, you will see why a futures contract is called a zero-sum game.
• Understand the concept of leverage, which lets us manage a bigger investment with a comparatively smaller amount of funds. 

Topic 8: Volume, Open Interest & Rollover

• Here, you will learn about volume and open interest. By analysing these measures, traders may assess market participation, liquidity, and potential trends. 
• Learn how to analyze the open interest data.
• Understand the relevance of rolling over contracts before they expire.

Topic 9: Participants of the Derivatives Market

• Moving ahead, you will learn about the various market participants, including hedgers, speculators and arbitrageurs.

Topic 10: Pricing of Futures

• You will first understand the cost of carry model, which calculates futures prices by considering interest rates and dividends. 
• Look at another formula that uses continuous compounding. 
• See how market expectations affect futures prices, leading to concepts like contango and backwardation.

Topic 11: Futures Strategies

• In this futures trading course, you will learn futures trading strategies such as Bull Calendar Spread and Bear Calendar Spread.

Topic 12: Resources

• You will also learn how to analyze derivatives data using StockEdge and the NSE website.

Topic 13: Income Tax on Futures and Options Trading

• In this section, you will explore the basics of taxation on F&O Trading.
• Learn how to determine the tax on F&O turnover.