11.12What are futures trading risks?
Time-sensitive: Futures STT raised from 0.02% to 0.05% (sell side) by Budget 2026, effective 1 April 2026. Rules and rates change, so check the official source before acting.
1What is it?
The main risks of trading futures.
2Why does it exist?
Knowing them before trading can save your capital.
3Risks
- Leverage: a 12% adverse move can wipe out 100% of margin.
- Unlimited loss: losses can exceed your margin.
- Daily MTM: you must fund losses immediately.
- Gaps: overnight news can cause large losses before you can react.
- Physical settlement of stock futures: you may have to take or give delivery.
- Higher STT: 0.05% on the sell side for futures from April 2026.
4Quick revision
- Leverage, unlimited loss, daily MTM, gaps, settlement, costs.
5Knowledge check
Q1. Can you lose more than your margin in futures?Show answer
Yes.
Q2. Futures STT (sell side) from April 2026?Show answer
0.05%.
Q3. Name one risk unique to stock futures at expiry.Show answer
Physical settlement (delivery obligation).