Glossary
Futures: meaning, example and why it matters
A contract to buy or sell an underlying asset at a fixed price on a set future date. Because they are leveraged, losses can exceed the margin deposited.
Worked example
A stock future at ₹1,000 with a lot of 500 shares has a contract value of ₹5,00,000. With a 20% margin you deposit ₹1,00,000. A 5% fall changes the position by ₹25,000, which is 25% of the deposit.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
Because you deposit only part of the contract value, gains and losses are large compared with the deposit, and losses can exceed it.
Related terms
See it in practice
Frequently asked questions
Can I lose more than the margin in futures?
Yes. Profit and loss are measured on the full contract value, so losses can exceed the margin deposited and the broker can ask for more money.
Is this page investment advice?
No. Futures is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.