Underlying Futures Contract

An underlying futures contract refers to the standardised exchange-traded agreement that forms the basis of a more complex derivative—such as an option on futures. For example, an option on the Nifty futures contract has the Nifty futures contract itself as the underlying, rather than the Nifty index directly. Understanding the structure of the underlying futures contract—including lot size, expiry date, and margin requirements—is essential for traders managing multi-leg derivatives strategies. On NSE, the most actively traded underlying futures contracts include Nifty 50 futures, Bank Nifty futures, and single-stock futures across sectors.