Advice for a person who is new to F&O Trading

Making predictions about the future is not an easy task. It takes a lot of knowledge, creativity, and wisdom. Traders of derivatives on the capital markets try to look into the future (read: futures & options).

Since it started in June 2000 on the National Stock Exchange (NSE), India has quickly embraced the risky but potentially lucrative form of trading. At the moment, more than 30 million contracts worth nearly Rs 50,000 crore are traded every day on the NSE.

Here is a guide for people who don't know much about trading F&Os, their risks, and the steps a first-time investor should take.

The value of a derivative comes from a spot price, which is called the underlying. Future and Option tips are two of the most common derivatives that are traded on the stock exchange in India. In a futures contract, you agree to buy or sell shares at a certain price in the future. An option contract gives you the right, but not the obligation, to buy (through a call option) or sell (through a put option) the underlying scrip at a certain date and price.

To start trading futures contracts, you have to put up a certain percentage of the total contract as margin money. The fact that you can make a bigger profit (or loss) with a small amount of capital makes a futures contract a leveraged instrument. Futures contracts can be bought for stocks, indices, commodities, and currency in India.

In Future and option trading tips, you pay the premium to buy the right to use your option. To buy or sell index and stock options, you have to put up a certain percentage of the value of the order as margin money. A call option or a put option are both types of options. A call option lets you buy the asset at a certain price or before a certain date in the future. This price is known as the "strike price." In the same way, a put option lets you sell the asset.

Making predictions about the future is not an easy task. It takes a lot of knowledge, creativity, and wisdom. Traders of derivatives on the capital markets try to look into the future (read: futures & options).

Since it started in June 2000 on the National Stock Exchange (NSE), India has quickly embraced the risky but potentially lucrative form of trading. At the moment, more than 30 million contracts worth nearly Rs 50,000 crore are traded every day on the NSE.

Here is a guide for people who don't know much about trading F&Os, their risks, and the steps a first-time investor should take.

The value of a derivative comes from a spot price, which is called the underlying. Future and Option tips are two of the most common derivatives that are traded on the stock exchange in India. In a futures contract, you agree to buy or sell shares at a certain price in the future. An option contract gives you the right, but not the obligation, to buy (through a call option) or sell (through a put option) the underlying scrip at a certain date and price.

To start trading futures contracts, you have to put up a certain percentage of the total contract as margin money. The fact that you can make a bigger profit (or loss) with a small amount of capital makes a futures contract a leveraged instrument. Futures contracts can be bought for stocks, indices, commodities, and currency in India.

In Future and option trading tips, you pay the premium to buy the right to use your option. To buy or sell index and stock options, you have to put up a certain percentage of the value of the order as margin money. A call option or a put option are both types of options. A call option lets you buy the asset at a certain price or before a certain date in the future. This price is known as the "strike price." In the same way, a put option lets you sell the asset.