How to calculate futures price of an equity share?

To calculate the futures price of an equity share, you can use the following formula:

Futures Price = Spot Price + (Cost of Carry - Dividend)

Where:

- Spot Price: Current market price of the underlying equity share

- Cost of Carry: Interest rate x (Days to expiration / 365)

- Dividend: Expected dividend per share (if any)

The formula can be broken down into:

1. *Spot Price*: The current market price of the equity share.

2. *Cost of Carry*: The cost of holding the underlying share until the futures contract expires, including:

    - Interest rate (risk-free rate, e.g., LIBOR)

    - Days to expiration (number of days until the contract expires)

    - 365 (days in a year)

3. *Dividend*: Any expected dividend payments per share during the contract period.

Example:

- Spot Price: ₹100

- Interest Rate: 6% (0.06)

- Days to Expiration: 60 days

- Dividend: ₹2

Futures Price = ₹100 + (0.06 x (60/365)) - ₹2

= ₹100 + ₹0.99 - ₹2

= ₹98.99

So, the futures price would be approximately ₹98.99.

Note: This is a simplified example and actual calculations may involve more complex factors like margin requirements, market volatility, and other market conditions.