Index Futures
Index futures are derivative contracts tied to an underlying index, such as Nifty Bank, Finnifty, or Nifty 50, reflecting sectoral, thematic, or benchmark performance. They allow traders to speculate on or hedge against the movement of an entire index rather than individual stocks. By trading index futures, investors mitigate the risks associated with single-share volatility, gaining exposure to a broader market segment. This approach simplifies risk management and offers a cost-effective way to engage with market trends, leveraging the collective performance of the index’s components.
Related Terms
Internal Rate Of Return
The Internal Rate of Return (IRR) measures the compound annual return of a financial asset,...
Hedging
Hedging is a risk management strategy used to offset potential losses by taking a position...
Advance/Decline Line
The Advance/Decline Line is a popular market breadth indicator that helps investors track the overall...
Issuer
An issuer is the company that sells its shares to the public for the first...
Delivery Date
The delivery date of a cash or derivative contract is the final date and time...
Bought Out Deal
A bought-out deal is a stock offering where an investment bank purchases the entire issue...
