NEWS

Securities and Exchange Board of India (SEBI) issued an order suspending futures trading in paddy (non-basmati), wheat, Bengal gram (chana dal), mustard seeds and its derivatives, soyabean and its derivatives, crude palm oil and green gram (moong dal) for a year, in a move believed to stem rising prices.

DETAILS

Futures Contract

• Agreement between buyer and seller
• Buy or sell an asset
• At a certain time in the future
• At a certain price
• Has to be honored by both parties on the due date.
• Used by traders or speculators who are engaged in arbitrage.
• Regulated by SEBI.

ARBITRAGE means that the trader shall buy the stock at a low price today as he wants to sell it on a future date at a high price.