Entering into a futures contract, you have to pay the initial margin is set by the stock exchange. Let us assume that the initial margin required to enter into an S & P CNX Nifty futures contract is 10%, and the contract traded at Rs.6000 and the contract size is 50

Therefore, the total value of a futures contract comes around Rs.6000 * 50 = Rs.3, 00,000. But it is enough if we only pay the initial margin of 10% of contract size, which comes around Rs.30, 000

Now if the price of the S & P CNX Nifty futures rising to 6100 in order to make a profit of Rs.5, 000 on an investment of Rs.30, 000 The return in this case is 16.67%. Similarly, if the price of the S & P CNX Nifty futures fall 5900, so a loser Rs.5000 with a negative return of 16.67%.

Conclusion

Since it is enough to pay only the initial margin amount of concluding a Futures Trading, it may either result in a huge profit within a short period, or it can swallow the entire trading capital. One has to assess his risk appetite before entering into a futures contract.