Cash Vs Future Markets

Cash Market

In Cash market stocks are traded, where in the delivery of stock takes place. When we buy shares and take delivery, we become shareholder of the company till we hold the shares. Delivery will be done It is done on T+2 days. Full amount needs to be paid at the time of buying shares in cash market. we can buy even single share of company and in cash market we can buy shares and hold for life. When we are shareholder of the company, we are entitled to receive dividend most of the People buy shares in cash market for investment purpose

Future Market

In Future market is a place where only future contracts are bought and sold at an agreed date(expiry) in the future and at a predefined price. We can never be a shareholder when we trade in Futures. No delivery takes place as the Future contract expires on expiration date. Only margin money requires to be paid for initiating Future contract. One must buy a minimum lot size which is already defined. Such as in case of BANKNIFTY lot size is 40. In futures, we must settle the contract on the expiration date i.e. maximum of 3 months. In future contract we are not entitle for any dividend. Futures can be traded for Arbitrage, hedging.