Derivatives, in plain English.
Futures and options sound complicated. The ideas underneath are not. Here's how the contracts you'll trade on SigmaFX actually work — and an honest word on the risk that comes with leverage.
Six ideas that cover most of it
Futures
An agreement to buy or sell an index or stock at a set price for a future expiry. You trade it by the lot on margin, so a move in the underlying is magnified — up and down.
Options (CE / PE)
A call (CE) is the right to buy; a put (PE) the right to sell, at a strike price by expiry. Buy one and your risk is capped at the premium you pay, while the directional upside stays open.
Lot size & tick
Derivatives trade in fixed quantities called lots, set by the exchange per contract. The tick is the smallest price step. You trade whole lots; both are shown on the order ticket.
Margin
The amount you post to open and hold a leveraged position — SPAN plus exposure, as the exchange computes it. Fall below the required margin and positions can be squared off, so keep a buffer.
Expiry & rollover
Every contract has an expiry — weekly or monthly. Index futures and options are cash-settled at expiry; to keep a view going you roll the position forward to the next expiry.
The option chain
A grid of every strike and expiry for a call and put, with live premiums, so you can read where the market is pricing risk and pick the contract that fits your view.
How each market works
The four segments on SigmaFX, what trades in each, and when.
NSE Futures
A futures contract commits you to buy or sell an index or stock at a set price for a future expiry. You trade it by the lot with margin, so a small move in the underlying is magnified — in both directions. Most traders square off or roll to the next expiry rather than carry to settlement.
NSE Options
An option gives the right — not the obligation — to buy (CE) or sell (PE) the underlying at a strike price by expiry. Buying an option caps your risk at the premium paid while keeping the upside of a directional view. The full option chain, strikes and expiries are in the terminal, with zero brokerage.
MCX Commodities
MCX futures let you trade the price of gold, silver, crude oil, natural gas and base metals by the lot. The commodity session runs far later than equities, so global cues in bullion and energy are tradeable into the night. Positions are squared off before expiry — there is no physical delivery to manage.
GIFT Nifty
GIFT Nifty is the Nifty 50 futures contract traded on NSE's International Exchange at GIFT City. It trades for roughly 21 hours a day across two sessions, so it reflects the overnight global move and often sets the tone for the Indian cash-market open. Traders use it to take or hedge a Nifty view well outside domestic hours.
Leverage cuts both ways
Derivatives are leveraged. The same margin that lets a small outlay control a large position also means a move against you is magnified — you can lose money quickly, and in some positions more than you put up.
- Trade only with capital you can afford to lose.
- Size positions to your account, not to the margin on offer.
- Use stop-losses and keep a margin buffer.
- Know each contract's expiry before you take it on.
SigmaFX provides a platform, not investment advice. See the full risk disclosure.
Start with the smallest step
If you're new, begin with a single lot of an index future or a bought option, where the cost is defined. Watch how margin, charges and the price interact on real orders before you scale up. The terminal shows the lot size, margin and every charge before you confirm.
* Lot sizes, trading hours and expiry dates are set by the exchanges and revised periodically. The live, binding figures always appear on the contract and on the order ticket before you confirm.
Ready to put it to work?
Open an account and place your first trade, by the lot, with every charge in view.