Website www.narendranainani.blogspot.com

Bullet Advisory Indian Stocks-How To Trade Nifty In Future 

Everyday we listen about Nifty closing up or down,market 

bullish or bearish.We wonder how to trade Nifty and earn 

profit.Nifty is an index and not a stock which can be bought 

and kept in a demat account then how to trade Nifty where we 

cannot take the delivery.The answer is to trade Nifty future.

We can buy or sell Nifty future.What are the points we have 

to keep in mind while trading Nifty future,how to calculate 

the profit and loss.First of all we have to determine the 

direction of the market whether market will be up or down.We 

can take the position in Nifty future in the expected 

direction bullish or bearish.If we are bullish then we can 

buy Nifty future and if bearish then we can sell Nifty 

future.What trade we can execute and what would be our 

position in terms of profit and loss are explained below 

with examples.If current price of Nifty in January is 2900 

and last date of expiry is on nth January then what trades 

we can do and what will be our profit and loss position is 

as stated below. 

Trade we can do if we are bullish 

(1)Buy Nifty Future January @2900 Lot Size 50

 We can sell Nifty anytime till last day of expiry i.e., nth 

January and can book profit or loss.If we do not sell Nifty 

we have bought till lasts day also then our trade will be 

automatically squared off at the settlement price of Nifty 

on last day of expiry decided by the exchange.

Different Possibilities with our Nifty buy position

(1) Nifty price 2950 and sold before expiry then

2950-2900=50*50=2500.00 IRs. Profit

(2)Nifty price 2850 and sold before expiry then

2900-2850=50*50=2500 IRs. Loss

(3)Nifty settlement price 2950 and we have not sold Nifty 

till expiry then

2950-2900=50*50=2500 IRs. Profit

(4)Nifty settlement price 2850 and we have not sold Nifty 

till expiry then

2900-2850=50*50=2500 IRs Loss

(5)Nifty settlement price 2900 and we have not sold Nifty 

till expiry then

2900-2900=0.0 IRs. No Profit no Loss

Trade we can do if we are bearish

(1) Sell Nifty Future January @2900 Lot Size 50.

We can buy Nifty anytime till last day of expiry i.e., nth 

January and can book profit or loss.If we do not buy Nifty 

we have sold till lasts day also then our trade will be 

automatically squared off at the settlement price of Nifty 

on last day of expiry decided by the exchange.

Different Possibilities with our Nifty sell position

(1)Nifty price 2850 and bought before expiry then

2900-2850=50*50=2500.00 IRs Profit

(2)Nifty price 2950 and bought before expiry then

2950-2900=50*50=2500.00 IRs. Loss

(3) )Nifty settlement price 2850 and we have not bought 

Nifty till expiry then

2900-2850=50*50=2500.00 IRs. Profit

(4) Nifty settlement price 2950 and we have not bought Nifty 

till expiry then

2950-2900=50*50=2500.00 IRs. Loss

(5) Nifty settlement price 2900 and we have not bought Nifty 

till expiry then

2900-2900=0.0 IRs. No Profit No Loss

Before trading in Nifty we should be aware of the margin 

requirement of the exchange.Over and above margin we will 

have to settle the profit and loss on daily basis depending 

on closing price of Nifty.We can get our margin money + 

profit or margin money-loss back once we square up our trade.

We should also try to know the last day of expiry which is 

usually on last Thursday of the month before trading.We also 

have an option to trade in Mini Nifty having lot size 20 

where margin requirement is less compared to Nifty.

Narendra Nainani

AHMEDABAD, GUJARAT, India             

Narendra Nainani is renowned technical analyst and stock market advisor of INDIA having experience of more than 26 years having excellent success ratio.Expert in Derivatives Products-Futures & Options,Intraday,Short Term ,Medium Term,Long Term,Portfolio Management,IPO & Mutual Fund Advisor.Covered regularly by E TV & Business Magazines like The Economic Revolution for Market views.

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