Futures Contracts & Derivatives Markets

What is a Futures Contract?

A standardized contract to buy or sell an asset at a fixed price on a fixed future date. Traded on exchanges like NSE (India), CME (US).

Key Concepts

• Notional value: Contract size × price. Large multiples of the underlying.
• Margin: You post only ~5–15% of notional as collateral.
• Mark-to-market (MTM): P/L settled daily. Losses trigger margin calls.
• Rollover: Close position in expiring contract, open in next expiry.