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Final Settlement Price in Futures Trading

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Questions and Answers

What is the difference between a trading holiday and a clearing holiday?

There is no difference between a trading holiday and a clearing holiday
A trading holiday is when no clearing and settlement takes place, while a clearing holiday is when no trading is possible
A trading holiday is when the exchange is open, while a clearing holiday is when the exchange is closed
A trading holiday is when the exchange is closed, while a clearing holiday is when the exchange is open but no trading takes place (correct)

What is the final settlement price for the May Nifty futures contract?

The average price of the Nifty index during the contract period
The opening price of the Nifty index on the expiration date
The highest price of the Nifty index during the contract period
The closing price of the Nifty index on the last trading day of the contract (correct)

What is the contract size for the BSE Sensex futures contracts?

10 units of the BSE Sensex (correct)
100 units of the BSE Sensex
5 units of the BSE Sensex
1 unit of the BSE Sensex

What is the tick size for the BSE Sensex futures contracts?

Rs. 0.05 (D) Signup and view all the answers

How many serial weekly and serial monthly contracts are available for the BSE Sensex futures?

7 serial weekly and 3 serial monthly contracts (C) Signup and view all the answers

What are the trading hours for the equity futures contracts?

9:15 am to 3:30 pm (B) Signup and view all the answers

What is the purpose of daily settlement price in the context of futures contracts?

To settle all open positions daily based on a price calculated by the exchange (D) Signup and view all the answers

When does the May Nifty futures contract cease to trade, based on the information provided?

May 25, 2023 (A) Signup and view all the answers

What determines the tick sizes on traded futures contracts?

Exchange's decision as part of contract specifications (A) Signup and view all the answers

How is the daily settlement price calculated for futures contracts?

Using the last half-an-hour weighted average price of that futures contract (D) Signup and view all the answers

What happens to open positions of the May Nifty futures series after its expiration?

They are automatically settled by the exchange (D) Signup and view all the answers

When do monthly futures contracts on the Nifty Financial Services Index expire?

On the last Tuesday of their expiry month (A) Signup and view all the answers

What is the role of the clearing corporation associated with the exchange in futures trading?

Guarantees settlement of trades (D) Signup and view all the answers

In futures trading, what position does a trader take when buying futures contracts?

Long position (C) Signup and view all the answers

What is a key characteristic of futures contracts in terms of quality and quantity?

Quality and quantity are standardized (B) Signup and view all the answers

How do futures contracts differ from forward contracts?

Forward contracts can be customized by the parties involved (B) Signup and view all the answers

What is a limitation of futures contracts in terms of underlying set?

Limited underlying set (A) Signup and view all the answers

How do futures markets determine the terms of a futures contract other than the price?

Through interaction of buyers and sellers (A) Signup and view all the answers

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