How gain loss calculated in future stocks

[mutualguru]

I am doing future stocks paper trading in nse pathshalla. I have one long and one short future stock. The last time i checked (yesterday afternoon) my Gain/Loss (Realized Profit/Loss) is -6000 rupees today morning when i checked my Gain/Loss (Realized Profit/Loss) is -15000 rupees? what is happening. I didnt do any kind of trading other than initial "buying/Selling" of long, short future stocks. what is this means? I thought similar to stocks a gain/loss will be registered if you buy and then sell a stock. what is happening here?

 

[amitrandive]

I am doing future stocks paper trading in nse pathshalla. I have one long and one short future stock. The last time i checked (yesterday afternoon) my Gain/Loss (Realized Profit/Loss) is -6000 rupees today morning when i checked my Gain/Loss (Realized Profit/Loss) is -15000 rupees? what is happening. I didnt do any kind of trading other than initial "buying/Selling" of long, short future stocks. what is this means? I thought similar to stocks a gain/loss will be registered if you buy and then sell a stock. what is happening here?

Google "MTM" (Mark to Market), even if you don't trade,but have an open position MTM will be calculated on a daily basis.

 

[mutualguru]

@amitrandive thanks for the info as I have only a basic understanding of finance can you explain a little bit more. I have found this link http://www.nseindia.com/products/content/derivatives/equities/settlement_mechanism.htm but only understood a little bit from it. the only thing i understood from the link is that MTM is computed daily.

What is the advantage and disadvantage of MTM in futures? Does this mean I should avoid overnight trading?

Please forgive me but i really don’t understand financial terms and its influences

 

[amitrandive]

@amitrandive thanks for the info as I have only a basic understanding of finance can you explain a little bit more. I have found this link http://www.nseindia.com/products/content/derivatives/equities/settlement_mechanism.htm but only understood a little bit from it. the only thing i understood from the link is that MTM is computed daily.

What is the advantage and disadvantage of MTM in futures? Does this mean I should avoid overnight trading?

Please forgive me but i really don’t understand financial terms and its influences

Yes, there are both advantages and disadvantages of overnight trading in futures.

If you are long in a stock/index future,if the market opens gap up and closes above ,you stand to have a huge gain.
But if the market gaps down and close below ,you stand to get hit by big amount.

Some links

http://www.investopedia.com/university/beginners-guide-to-trading-futures/
http://www.investopedia.com/university/futures/futures6.asp
http://www.futurestradingpedia.com/mark_to_market.htm

 

[mutualguru]

@amitrandive is MTM optional or compulsory? can i trade future stocks without a daily MTM?

I was interested in futures stock because of the high leverage. I am sure of a future stock which will go up with in 15 day (say 320 to 380) but the stock is volatile. If i trade this volatile future stock using MTM my profit will decrease considerably and may even generate loss comparing to buying/selling stocks without mtm.

Do you have any suggestion/advice regarding this?

 

[amitrandive]

@amitrandive is MTM optional or compulsory? can i trade future stocks without a daily MTM?

I was interested in futures stock because of the high leverage. I am sure of a future stock which will go up with in 15 day (say 320 to 380) but the stock is volatile. If i trade this volatile future stock using MTM my profit will decrease considerably and may even generate loss comparing to buying/selling stocks without mtm.

Do you have any suggestion/advice regarding this?

If this were optional , all of us would have taken the optional option

Be careful ,Futures and options are dangerous highly leveraged instruments.
If you don;t understand stay away from them.

 

[mutualguru]

Thanks :thumb::thumb: