What are the different types of Futures Contracts?

Futures contracts are standardized agreements to buy or sell an underlying asset at a predetermined price on a specified future date. Here are the most common types:

• Stock Futures

These contracts have individual stocks as their underlying asset. The buyer and seller agree to trade a specific quantity of a stock at a fixed price on the contract’s expiry date.

• Index Futures

Index futures are based on market indices (like Nifty 50 or Sensex). They are commonly used by traders to speculate on or hedge against future movements in the broader market.

• Currency Futures

In these contracts, the underlying asset is a currency pair (e.g., USD/INR). They are used to hedge against foreign exchange risks or to speculate on currency movements.

• Commodity Futures

These contracts are based on physical commodities like gold, crude oil, silver, agricultural goods, etc. In India, they are traded on exchanges such as the National Commodity & Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX).

• Interest Rate Futures

These contracts are based on debt instruments or interest rates, such as government bonds and treasury bills. They are used to manage exposure to interest rate fluctuations.

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If you need any support, you can contact the Share India support team via email at support@shareindia.com or call at 1800 203 0303.