Nifty Trading

Nifty

Nifty is traded by Hedgers, Arbitrageurs, and Speculator Intraday or positional traders.

Hedgers buy stocks in the market and to balance the risk they trade in the Nifty futures to avoid risk through holding a opposite position to avoid sudden market move in one direction. By doing hedging they safe guard their stocks.

Arbitrageurs attempt to make profit from pricing difference making simultaneous
trades and capture a risk free profit. An arbitrageur also
make profit if there is price discrepancy between the stock price in the cash and the derivatives markets.

A Speculator is one who trade in the derivatives market with different views on the speculating the
movement of the Nifty price. With large, risks they trade based on anticipated movements of future price.

Nifty traders trade based on some theory, strategy, or Technical analysis, some buy tips, some have their own style of trading. some learn it with a hope to make quick gains.

Speculator traders normally trade for short period, some time for intraday or a position holding time of 2-3 days to one month. When the price of Nifty moves as per their speculation they make large profits.

Nifty is traded in NSE derivatives with 3 different future lots called as contract of current month, next month, far month.

Many traders prefer to trade in options rather than Nifty, they believe trading options are less risky as they need less margin money then trading Nifty futures.