You can find the following details in the futures contract:
Expiry date: This specifies the final trading day for the contract. After this date, the exchange facilitates settlement and according to the contract terms. For example, the NIFTY JAN 24 contract expires on the last Thursday of January 2024.
Contract size: This defines the minimum tradable quantity, also known as the lot size. Typically, it’s a set unit, but can vary depending on the underlying asset. For example, a contract of NIFTY has a lot size of 50, meaning one contract represents 50 units equivalent to the Nifty index.
Initial margin: This is the minimum deposit required to initiate a position. It fluctuates with the underlying asset’s volatility; volatile assets generally demand higher margins.
Price quotation: This specifies the value at which the futures contract is currently being traded. Generally a futures contract trades at a price which is above the spot price of the underlying index. For example, the price quotation for NIFTY JAN 24 can be 21860 while the underlying NIFTY index may be trading at 21730. The further the expiration date of the futures contract the higher will be the difference between index value and price quotation of futures.
Tick value: This represents the smallest possible profit or loss per contract, based on a price movement of one tick. For all the contracts traded on NSE, the minimum tick size is ₹0.05. It means for one NIFTY contract of lot size 50 the tick value will be 0.05*50=₹2.5
Mark-to-market (MTM) process: This daily exchange procedure values all open positions according to current market conditions, ensuring timely recognition of profits and losses. It also manages risk for participants.
Delivery date (if applicable): For physically settled contracts, this specifies the deadline for the seller to deliver the underlying asset. This date usually falls after the expiry date. While index futures are all cash settled in India.
Daily settlement: This procedure involves the exchange crediting or debiting accounts with daily profits and losses calculated through the MTM process.
