Investing in Futures

                                     Investing in Futures

In equity market we invest by purchasing shares of certain company. The money grows when the the price of the share grows and we book profit by selling these shares. This is called as cash segment of equity market. Most of us know this.

There are more instruments in equity market where we can invest or 'trade' for earning profit. These instruments are usually derived from a Company's Stock (Share) as a base instrument. These are called as Derivative and the segment is called as derivative segment. The types of derivatives are Futures and Options. 

Lets talk about futures for the time being. To put it simply, in futures, the investors or traders predict the future price of a security (share). 

The Futures are traded in lots. The volume (No. of shares) in One Lot are so adjusted that the price  of one lot comes between  2.25 L to 3 L (approx).  But while trading in Futures we do not have to pay all the amount (Price of a lot). Instead we pay a margin to the broker. For instance in May 213 series one lot of TCS is of 250 shares. Price of TCS is currently at 1470. So the price of lot comes to 250*1470= 367500. But the broker ask us a margin of around 62000. It means we buy share worth Rs367500  in 62000. The profit or is to be adjusted on daily basis.

The futures trade in 3 monthly series and the series expires on last Thursday of the month. If we are holding a position, we have to compulsorily square off the position on the day of expiry. 

You can earn money in rising market as well as falling market. How? We know that we can buy futures (consider a lot of shares) and sell it at higher price to earn profit. But the 'news' is that we can 'Sell" futures at a higher price (before buying it), and later 'Buy' (square off) the futures at a lower price, to earn profit.  

Now, why do we trade in futures?

The beauty is that it offers two big advantages over Cash Market-

1. For buying one lot of Futures, you just have to pay 15-20% of total cost of the lot.

2. You can earn money in rising market as well as falling market.

Based on our Research and Analysis we invest either on Long (Buy) or Short (Sell) side to earn profit for our customers.

The risk reward ratio is quite favorable in Futures, though there is risk involved, if the discipline is not followed.

I tried to make it as simple as possible. Hope I am clear in what I wanted to convey.

Please get back on anything that I can help you on. (bonvistaplanners@gmail.com)

Check our performance for April Series:

Technical Analysis to design suitable trading strategy!

Workshop on Technical Analysis and designing of suitable strategy.

Technical Analysis is like a powerful map in deep jungle. It guides us through the jungle of shares in very simplified manner. 

The name Technical Analysis seem to be very complicated, but believe me the fact is oppoisite. Any one can learn and implement the Technical Analysis to reduce losses and increase profits.

Being Financial Planners we feel that literacy about the equities in Indian Markets need to improve. We feel the common man should participate in equity market to earn good returns. 

We are coming up with a 2 days workshop on Technical Analysis for equity market

This workshop will enable you to enter the market confidently. If you are already in the market, TA will be powerful weapon with you to deal with bulls and bears of the market.

Anyone who knows what is Share can participate in the workshop.

To know more about the program, just fill up inquiry form on this site or write to us on unmesh@bonvista.in or call us on 9371444875

Hey,
We shall formally launch our website www.bonvista.in by 15th Feb.

Bonvista Financial Planners is plan and implement organization

Financial Planning

In simple language, financial planning is management of financial resources & its deployment to take care of ‘current’ and ‘future’ needs of an individual or a family.

At Bonvista Financial Planner’s, we believe that successful financial planning process should have a perfect blend of theory and practical issues.

Financial Planning  involves analysis and planning in following areas.

Networth Analysis:

This involves analysis of your assets (something which you have) and liabilities (something which you owe). In this exercise we help you to understand your current financial standing (worth).

Cash Flow Analysis :

The process of cash flow analysis helps measuring current position on money ‘coming in’ and money ‘going out’. This process also helps in finding future financial requirements. Cash flow analysis helps you in understanding your current expenses and saving structure. This exercise also gives you an idea of future expenses and money that you will be able to save for your future.

Financial Ratios :

You can co-relate this exercise with Blood Sugar Check-up or Blood Pressure Check-up.

We help you understand whether your current loans are within the limits, whether your current savings are adequate, whether you have sufficient funds available with you in case of an emergency.

Risk Appetite :

We help you understand your thinking towards risk taking in context of investments.

We help you understand in what asset class, should you invest.

Goal Analysis and Goal Planning :

    

This part is “core” of a financial plan. We help you get clarity of various goals in your life, the period required for each goal and money required for each goal.

The next part of this exercise involves helping you understand the current funding available for each goal, how much more to be saved each month, how inflation will affect this goal, in which assets or in how many installments you should save money for each goal.

Insurance Planning : 

We help you understand current situation of your insurance policies, how much insurance you need, and what kind insurance policies you should buy.

Taxation :

With the help of our associates who are ‘Tax Experts’ we help you planning your taxation.

Succession Planning (“Will” writing) :

This is most important area, but usually most neglected. We help you creating you succession plan.