Nifty is a fair representative of the market in particular and the economy in general. So, it can be easily established that trading in Nifty Futures is a common proxy for trading in the market as a whole. When we talk of Nifty Futures, we actually mean the essential futures contracts on the Nifty. Usually, 75 units are considered the minimum lot size of the Nifty making the lot value a little over Rs, 7.50 lakhs. Just scroll through to know some of the useful Stock Future Tips which will help you to become a pro while you are trading Nifty Futures Intraday and also for the longer term.
Useful Nifty Future Tips:-

• Before Trading, check the futures spread over spot:-
Normally, the futures trade at a spread that is over the spot price. When the conditions are normal, the monthly spread over the spot price is set on the prevailing cost of funds. It is popularly known as the cost of carry and mainly future quotes at a premium. Here, you should keep in mind these two Stock Future Tips. Never buy Nifty Futures when it is at a steep premium to the spot index as it might be a case of too much optimism or a case of overpricing. Also, never jump in to buy Nifty Futures which are at a discount as it can be a case of aggressive futures selling. Before trading in Nifty Futures, you should properly understand the logic of the spread.

• This is a leveraged position so treat it accordingly:
Like all Futures position, Nifty Futures are also leveraged. In the near month, if you buy one lot of nifty, for normal trades, the margin is around 10% and for MIS (Intraday) trades, it’s around 5%. Thus, in intraday trades, you get 20 times leverage and in normal trade, you get 10 times leverage. It’s always a two-way thing. Leverage means that your profits will get multiplied but that also means that your losses also get multiplied. Hence, you should always trade in Nifty Futures with profit targets and strict stop losses. This is one of the most useful Nifty Future Tips.

• Before taking a position, always check data on open interest:
Before you take a Nifty Futures position, it always pays if you do some scientific data analysis. You will get an idea of whether the open interest is growing up on the short side or long side if you have a quick look at the open interest of the Nifty Futures together with its accumulation trends. Always take a more informed view on the Nifty direction.

• Stay away from a liquidity trap:
Nifty Futures being one of the most liquid contracts, Liquidity has never been a major challenge. But, there are certain cases, when the nifty futures can get into your liquidity trap. Once the rollovers are substantially completed, you will normally find the volumes on the Nifty Futures vanishing on the expiry day. Moreover, if the market is falling exponentially, the spreads can broaden considerably which increases the risk of trading Nifty Futures. You should always keep these Stock Future Tips in mind.

• Always be cautious of the overnight risk in Nifty Futures:
You can put stop losses during the day but these orders don’t cover the overnight risks. Just imagine what you would do if you are long on the Nifty Futures and maybe owing to a crash in the Dow, the Nifty crashes by 200 points on opening. Stop Losses don’t function which exposes you to the overnight risk in Nifty Futures.

• Always comprehend the trade from the perspective of the counterparty:
This Nifty Futures Tips is an important aspect of Nifty Futures Trading. When you are purchasing Nifty Futures, there should be another party that is selling and the same logic goes when someone is selling Nifty Futures. The other party could be a hedger or a trader and you can get necessary insights from the open interest data. While you are normally driven by your perspective on Nifty, you can get greater clarity in your Nifty view once you understand the counter view.

• Always keep a tab on the dividends, tax implications, and transaction costs:
Remember that you are committing real money when you are trading on Nifty Futures. So, you should always keep in mind these two Stock Future Tips. Firstly, dividends are not earned by futures and thus dividends lead to future that are quoted at a discount. You should always take this factor into consideration while taking a position. Secondly, there are implications of statutory costs and brokerage when you trade Nifty Futures. In the breakeven, this creates a huge difference.

Final Thoughts:
So, these were some of the most useful Nifty Future Tips which you should keep in mind while you are trading in Nifty Futures. You can surely trade better once you implement these tips in actual practice.