Advantages of Trading in Nifty Futures and Nifty Options
Posted: Jun 10, 2019
I had done a lot of RESEARCH before to write this article - "Advantages of nifty future and Nifty Future Tips ". Today in this article I will share why a trader should trade in nifty future and options. There are some great benefits of Nifty future and nifty option Trade. According to a study, 75% of total turnover in NSE is influenced by nifty future and nifty option that's cover a huge volume. Future and option I nifty have highly liquid contracts and it is less volatile in nature compare to other stock. Nifty may bring the odds in your favor.
Why to trading in Nifty future and Nifty Option is better than another trading?
Here are some points:
1. Lower spreads:
This means bid difference, as the price difference in the quote of buyers and sellers. It important factors for traders, especially for those who work on scalping trade strategies. Minimum the difference the lower will be the trading costs. As nifty futures and options are one of the popular trading, the bid-ask difference is relatively better. Therefore trading in nifty may give you better prices to buy or sell.
2. Well diversified:
The nifty50 index is well diversified, it is consists of 50 stocks from 10 or more different sectors. This diversification provides stability and therefore help you when your analysis may go wrong. Also, this diversification supports us to see the high-level view of the market in near and longer term.
3. Fewer margins:
As in nifty future, the Minimum margin required is Just 8 % to take a position. Compared to this stock futures to take positions required list 13% of margin. Some brokers also provide trade in nifty future with just 5000 Indian rupees good margin for intraday positions. Check here for Nifty Future Tips
4. Highly liquid options:
As get high liquidity in Nifty options, and it’s easy to research and trade. Here need is to study various Out-of-the money and In-the-money options along with open interest. These options can be used for hedging bushes against your long or short positions.
5. Study stock portfolio:
As nifty being a benchmark index and most of the stocks reflect a similar trend. The stocks mostly just follow the Nifty movement, hence it can be used as a powerful strategy against your portfolio. But hedging is a good strategy for big traders who have deep pockets.
6. Far month liquidity:
As there is liquidity in a study of last months at Nifty futures compared to stock futures. It becomes easy here to take a positional, view by buying next and far month Nifty contracts. The trader needs to execute complex trading strategies using the long and short combination of nifty future.
7. Easily to predict:
Tracking and predicting the market moment in nifty is easy compared to stocks. As for nifty we have to analysis technical analysis charts. Nifty usually follows the domestic market as well as global market trends and sentiments.
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