How to Use Index Futures to Forecast the Future?

The index futures, which are traded in the Indian market, are well-known as the Nifty. The Indian stock market opens at 9.15 am and closes at 03.30 pm. Conversely, the nifty futures in the world market are traded the whole day. It is traded in diverse markets in the world. As it is called, CNX Nifty is a powerful sign for the stock forecast. It is possible to keep track of the CNX Nifty before the stock market opens. This can give you a clue where the stock market may open, whether it will gap up, gap down, or open flat.

Before stock trading, brokers generally make it a routine to look at the CNX Nifty to judge the opening of the market. When you trade with the intraday stock charts and do online trading, you can presume the market opens with the CNX nifty value and then make rapid support or a resistance level in a minor time frame chart for a swift trade-in the morning market.

What Is The Difference Between The Value Of Nifty And The Value Of Nifty Futures?

There are a few differences between nifty and the value of nifty futures. An adjustment is made to compare like with like. This is known as a fair value.

The fair value of the index is calculated as FV = S * [1 + (I – D)], Where FV stands for the fair value, S stands for the current price of the index, I stands for the current rate of interest to buy the nifty components and D stands for the current dividend rate on the nifty components.

Index Futures To Forecast The Open In The Market

The index futures indicate what is happening to the CNX nifty in the world market and how the market should open today. This allows you to take a quick entry and exit position in the market and book profits if you have been carrying forward a trade from the previous day.

The index futures may not be the sole measure to trade on the market future, but on the other hand, it acts as a very dependable intimation to take trades in the morning. Conversely, during the rest of the day, you need to technically evaluate the Nifty to take intraday trading calls in Nifty futures.