Tips and Tricks


Another valuable stock market investing for beginners tips is to avoid trading stock derivatives. The derivatives market is mostly made up of futures and options. These are contract-based purchases which have a fixed expiry date. Just like the margin facility, the derivatives market looks very attractive as it allows you to make bigger purchases with little capital.

For instance, you can purchase a futures contract of SBI with only a margin of about Rs. 2 lakhs at the current price of Rs. 360. One futures contract of SBI contains 3000 shares. Purchasing 3000 shares of SBI in the cash market at the price of Rs. 360 each would cost you more than Rs. 10 lakhs. While professional traders regularly trade derivatives, they are not for beginners.

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