How is futures trading different from margin trading?

In a margin transaction, the positions are squared off the very same day whereas, in futures trading, the positions can be held until the expiry of the contract. In an intraday margin transaction, the investor has the option of converting his position to delivery, provided he has sufficient cash/shares in his Demat account (depending upon whether he has a buy position or a sell position). Whereas the investor has no such option in futures transaction since all futures contracts are cash-settled.

Was this article helpful?


Related Articles