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What is Futures trading? Can anyone explain it in layman terms with Examples please?

April 26, 2017Business examples explain Finance Futures Investing layman terms trading

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What is Futures trading? Can anyone explain it in layman terms with Examples please?

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Futures means buying or selling for the future. Nifty futures are opened for 3 months. Nifty futures are available as lots. ie, one nifty future contract contains 50 derivatives of nifty. Let the nifty be at 4800. And you think nifty may touch 5000 next month. Then you can buy some lots of nifty futures (If you think nifty can come down on october say 4700, then you sell futures). Value of nifty future may be playing around the actual nifty value. Suppose the market value of nifty future for october is now at 4850. You can buy 1 or more lots of futures now. Wait for an appropriate time to sell. or wait for the last Thursday of october (when the nifty oct. contracts expire).