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What is the term 'future' in stock market?


Date: 11 Feb 2016   Posted By: Paresh Gujarati     Group: Finance & Banking    Category: Investments   

I have started investing in stock market recently and getting used to its new vocabulary. I do not know what is the meaning of 'future' in stock market perspective. What is its real meaning when it is associated with a particular share or any investment?

Investing in share market? Learning the various terminologies and concepts of the same? In this thread, get to know the meaning of 'future' in stock market.


Author: Mahesh    12 Feb 2016      Member Level: Diamond     Points : 6  (Rs 6)    Voting Score: 0

Future in the trading refers to the future contract where you buy the shares with specific future pricing and delivery. So the context here for future is deciding the future pricing for the share. This share option is known as future trading. It is popular among units such forex, cement, chemicals, pharma and food.

Most of the IT and the other sectors are not much traded into the future exchanges. If you know how to do the forex trading then you won't be having problem trading in future. As the base principle behind future and the forex is pretty much the same. The units are traded with the future delivery and pricing in mind.

However do note that each stock exchange has different rules and policies for future trading. For example, New york and singapore both have different means of future trading. And london stock is even different compared to the other stock exchanges in context of future trading.


Author: Timmappa Kamat    12 Feb 2016      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

Future stock refers to the agreement to buy or sell a particular share for a future date at the price agreed. Stock futures offer a high leverage. It lets you invest in larger proportions at a lesser capital.




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