Future Trading Explanation With Market Updates

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Market gains for the fourth consecutive day ahead of RBI policy meet:

Markets continued to clock gains for the fourth day in a row ahead of RBI Policy meet (rate cut hopes led market higher side) with banks leading the gains after the govt proposed capital infusion plans. Sensex & Nifty ends with marginal gains, Nifty ends above 8500 level at 8543 and Sensex gains 72 points to settle at 28187.

HEADLINES FOR THE DAY:

  • July Manufacturing PMI speeds to six-month high.
  • Punj Lloyd surged as bagged new orders worth Rs 477 crore.
  • PSU Bank gains for the second day; SBI gains.
  • Jet Airways gains as much as after fuel price cut by 8.4% to 9.7%.
  • Footwear stocks were in demand; Realxo, bata India surged.
  • JBF surged higher as the company gets nod from board to raise fresh capital.

KEY STOCKS FOR THE DAY:

  • Sun TV gains 10 pvt head towards biggest daily gain in over 6 years post Q1 strong numbers. The Stock opened at 336 and hits a high of 397.70 on NSE.
  • Coal India today reported that company completed 97 pct of production target in July. Stock tanks.
  • Shares of NBCC moved higher as company bagged Rs 5.4 billion orders in the month of July. The Stock opened at 1032 and made a high of 1077 on NSE today.
  • L&T shares fall as much as after reported lower than expected quarter one numbers.
  • Apollo Hospitals surged nearly 2 pct as plan to launch three hospitals by December end.

ALL ABOUT JULY SALES NUMBER:

  • Tata Motors today reported 1.3% jump in July sales number at 40154 units against 39629 unit same quarter last year.
  • Ashok Leyland shares surged after reported 40% increase in last month sales number which stood at 11022 units gains 7861 units ( compared on a yearly basis).
  • Hero MotoCorp tanks as sales for the July month fall by 8 pct. The company sold 487580 units against 529862 units Y-o-Y.
  • M&M shares fall as much as in an positive market, sales declined by 3 percent last month at 34652 units.
  • Shares of Maruti hit fresh high on NSE after the company reported a 20.1% jump in July sales figure. 121712 units sold against 101380 units.
  • Hyundai today told that its July domestic sales up by 24.7 pct stood at 36500 units.

RESULTS BLOG:

  • United Bank gains despite of  21% fall in Q1 net profit,  which stood at Rs 52.2 crore on the back of higher provisions.
  • Aban reported slightly better than expected Q1 numbers as EBITDA beats street expectations, Net profit tanks 11% on a  yearly basis at Rs 135.4 crore.
  • Berger Paints shares gains as Q1 net jump 34 percent to Rs 77.3 crore against Rs 57.5 crore on the back of strong operational performance due to lower crude oil prices.
  • Bharat Forge Q1 up 34.7%, but didn’t meet expectations, profit stood at Rs 195.3 crore on the back of the strong margin performance. Revenue up 14.2% to Rs 1128.50 crore.
  • HCL Tech missed street expectations as reported 5.9% jump in Q4 net profit at Rs 1783 crore, revenue meets street.
  • Suzlon Energy rallied after reported robust Q1 numbers which stood at Rs 1047 crore for the April-June quarter.
  • McLeod Russel posted loss in quarter one (April-June) which stood at Rs 23.2 crore.
  • Atul Auto profit falls, reported single digit number of profit Rs 7 crore against 9.7 crore.
  • SPARC ended in a red zone in a positive market on the back of poor Q1 number.

CALLS FOR NEXT TRADING SESSION:

  • Sonatsoftw Eq is consolidating near its resistance breakouts could be seen in the next trading session. Buy above 161.30 targets 162.90/164.55/166.20 SL 159.50.
  • Nilkamal EQ gains for the third straight week, More buying straight could be seen in next trading day. Buy above 949 targets 958.40/968/977.80 SL 939.40.

NEWS TO WATCH OUT:

  • Watch out for the RBI Policy (Interest Rate Decision) on Tuesday i.e. on 04th Aug 15.
  • Indian markets traded in a range today. The reason for higher gains for Sensex than Nifty was a post result slide in shares of HCL Technologies which is a Nifty constituent but is not a part of the Sensex. An outcome of a monthly survey showed that the business confidence in manufacturing sector improved in the month of July.
  • The Reserve Bank of India’s (RBI)’s third bi-monthly monetary policy statement is due at 11:00 am tomorrow, 4 August 2015. The RBI had cut its benchmark lending rate i.e.. the repo rate by 25 basis points (0.25%) to 7.25% in the last meeting, 2 June 2015. RBI is expected to keep its interest rate constant.
  • PSU Banks went up as finance ministry has announced its strategy to pour more capital in next four years, approx Rs. 70000 crore in the four tranches (installments). Rs 25000 crores will be poured in this year and next financial year while two installments of Rs 10000 crores will be given in FY17-18 and FY 18-19. Oil stocks fell as OMCs (oil marketing companies like HPCl and BPCL) reduced their prices because of the fall seen in crude prices internationally.
  • Asian stocks went down because of the weak Chinese manufacturing data and continuous fall in commodity prices. Energy stocks led decline in the US market during the last trading session because of the weak earnings report posted by the world biggest energy firms Exxon Mobil and Chevron. European markets went up over positive results posted by European companies. Greek markets fell today, markets were closed for the last five weeks.
  • Crude oil prices are on decline as data showed that the OPEC countries have produced record output in July, a condition of over supply could rise in future if OPEC does not reduces its supply. Over supply will reduce the prices, however fall in production by the OPEC will support prices. China is the second largest consumer of oil in the world after US, Chinese economy is slowing down right now, posing big challenge for the oil producing countries.
  • COMEX Gold is expected to trade in the range of $1080-$1100; short term downward movement could be seen in gold.
  • Watch out for the Quarterly numbers Bharti Airtel, Britannia, Capital First, Shivam auto, Torrent Power etc on Tuesday i.e. on 04th Aug 15.

What is Futures Trading?

Trading performs in many different ways, like as an option and future, option, and provide facilities to trader for making trades versatility.  For making trade beneficially in option, trader need expert Option Tips, so that they will perform well. On the other hand Futures trading is a different kind of investment which process speculating on the value of the price of a commodity going increase or decrease in the future.

What exactly is a commodity? Explain its types:

There are many different kinds of commodity available such as the corn, which use as your morning cereal for breakfast, and the lumber that uses for your table and chairs, the gold is the most important commodity and special use for jewelers, the cotton by which you make clothes, the steel used for creating your machinery instrument, and the crude oil which run it, the wheat use for making bread

Given all these commodities are treated for trade between hundreds-of-thousands of traders in a fixed size daily, all over the world. They are all trying to earn a profit by purchasing a commodity at a small price and selling at a high trade value. Futures trading are principally speculative ‘paper’ investing, i.e. It is exceptional for the traders to really hold the physical commodity, this paper is also known as a futures contract.

What is a Futures Contract for Trading?

Future contract is a different kind of contract because it operates with a particular expiration date, you can hold this contract until it expires and you have facilities to cancel it anytime as you need. In fact, sometimes short-term investors only hold their agreement for a few times like as hours – or even minutes according their strategies or Stock Tips , Forex Tips. The expiration dates can be changed between commodities, and here you have an option to select which agreement good for your market objective.

We take an example, today is July 1st and you assume Gold will increase in price until last week on-August. The Gold agreement is accessible for the months of February, April, June, August, October and December. As it is the starting of July and this agreement has already terminated, you would approximately certainly select the August or October for gold trading.

The earlier contracts are frequently more liquid, that means many traders perform more trade. So, prices are more changeable and less likely to change from one tremendous to the other. Although if you consider the price of gold would increase until September, you would decide a further-out agreement (I. e. October month) – a September agreement doesn’t survive.

Neither is there a boundary on the number of agreements you can invest (inside reason – there should be sufficient buyers or sellers to perform trading with you.) Various biggest traders may trade in thousands of agreement at a time!

A Short History of Futures Trading

Before start Futures Trading, you should know about its basic, tips like as Nifty Tips, Stock Tips and history, any producer of a commodity like as a former, found himself at the compassion of a trader when it attempts to sell his commodity. The system required to be legalized in order that a particular amount and superiority of commodity could be traded between creator and dealers at a particular date.

An agreement was drawn up between the two parties identify a confident amount and excellence of a commodity that would be delivered in a specific month.

Who Trades Futures?

It didn’t receive long for businessmen to recognize the profitable investment opportunities accessible in these markets. They didn’t have to trade the real commodity, just the paper-agreement that held the commodity. As long as their outlet the agreement before the release dates, the asset would be simply a paper one. This was the beginning of futures trading assumption and investment nowadays, around 95-98% of futures trading are completed by speculators.

There are two kinds of Futures trader: ‘hedgers’ and ‘speculators’.

A hedger is a creator of the commodity e.g. oils companies, a farmer, an oil company, who deal a futures agreement to secure himself from future price variation in his product.

For instance, if a farmer considers the price of wheat is turning to fall by harvest time, then they can sell a futures agreement in wheat. You can process a trade through selling a future agreement primary and then go out the trade later by buying it. If the price of wheat does go down by harvest time, estimate the farmer money, he will turn back the cash-loss of earnings on the short-sale of the future agreement. He tries to sell at a high price and terminate the agreement by purchasing at a subordinate price a few months later, so making a benefit on the futures trade.

Futures contracts hedger is basically banks, pension fund companies and insurance companies who employ futures to hedge alongside any modification in the cash price of their products at future dates.

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