Very well explained. I just have one doubt. In the illustration, on day 7, when the contract was sold at 7800.0, it meant that the NIFTY had 7800.0 value in the market that day. correct? Or is it possible to sell the contract with next month''s price?
No it doesnt mean that closing price was 7800. Suppose during market hours @1.30 pm if we want to sell our position than at that time the price was 7800 so we sold it at 7800. You can buy or sell your positions at any time during the market hours. Hope this cleara your doubt. Happy trading ;) Keep minting money.