Futures

Futures and options represent two of the most common form of "Derivatives". Derivatives are financial instruments that derive their value from an 'underlying'. The underlying can be a stock issued by a company, a currency, Gold etc., The derivative instrument can be traded independently of the underlying asset. In futures market each script will have an expiry date, in indian markets it is on last thursday of every month.

If trader is bullish on any script he will buy in futures market. buying in futures market is similar to buying in deliver market but in Futures he can buy with margin.

For example in future market SBI margin % requirement is around 20 % and lot size is 125 shares.
If we consider SBI CMP is 2500 Rs and with around 50000 Rs we can buy 20 shares. In futures market we can buy one lot of SBI for 50000 Rs. If SBI raises 100 Rs , we get 2000 Rs in delivery market where as in Futures market we can make a huge profit of 12500. On bad side of Futures if SBI corrects 100 Rs in futures we lose 12500 where as 
in delivery mode maximum we loose is 2000 Rs !.

Similarly if trader is bearish in a script he can sell the script in futures market. 

Profit = lot size * change in script price

Nifty Bank Index scripts with weightage:


Company                      Weightage

SBI                               23.95
HDFC Bank                   18.81
ICICI Bank                     18.62
Axis Bank                      8.57
Punjab Nat Bank             5.91
Kotak Mahi Bank            5.81
Bank of Baroda              5.60
Canara Bank                  3.43
Bank of India                  3.18
Union Bank of India         2.45
IDBI Bank                      2.01
Oriental Bank                 1.66

Nifty IT Index scripts with weightage:

Company             Weightage
TCS                         37.58
Infosys                    27.52
Wipro                      17.01
HCL Tech                  5.67
Oracle Fin                 3.31
Tech Mahindra           1.88
Mphasis                    1.70
Patni Computer          0.77
Financial Tech           0.67
Core Projects            0.66
CMC                        0.62
Educomp Sol.           0.56
Tulip Telecom           0.44
HCL Info                   0.34
Rolta India                0.34
Mindtree                   0.30
Polaris Soft               0.26
OnMobile                   0.16
3i Infotech                 0.12
GTL                          0.11