Futures & Options
How does physical settlement work in F&O trading?
In the case of physical settlement of Futures and Options (F&O) contracts, rather than settling the contract through a cash payment, the actual underlying asset, typically stocks, is transferred from the seller to the buyer when the contract expires. ...
What is the settlement process for Futures and Options contracts?
Futures and options contracts can be settled in two ways: cash settlement or physical delivery. In cash settlement, the contract is closed by paying or receiving the difference between the contract price and the market price in cash. On the other ...
What are the key benefits and risks associated with F&O trading?
Benefits: Leverage - F&O trading allows traders to take larger positions with a smaller capital investment, enhancing profit potential. Hedging - investors use F&O to protect their portfolios from adverse market movements. For example, buying Put ...
What are Futures and Options in the stock market?
Futures and Options (F&O) are types of derivatives, which are financial contracts whose value is based on an underlying asset like a stock, index, or commodity. These are used for trading, hedging risk, or speculation and are traded on stock ...
How do Futures contracts differ from Options contracts?
Futures and options are both derivative instruments traded on Indian exchanges like NSE and BSE, but they function differently. A Futures contract is an agreement where both the buyer and the seller are obligated to complete the trade at a ...
Popular Articles
What is an online trading platform?
An online trading platform is a software application that allows investors and traders to buy and sell financial instruments such as stocks, bonds, commodities, currencies, derivatives (like Futures and Options), and other assets through the ...
What is a stockbroker, and why do I need one?
A stockbroker is a SEBI-registered individual or company that acts as a middleman between you and the stock market. In India, you can’t directly buy or sell shares on the stock exchanges like NSE (National Stock Exchange) or BSE (Bombay Stock ...
What is a speculative stock?
A speculative stock is a high-risk stock that offers the potential for high returns. Speculative stocks are often associated with companies that are new, have uncertain prospects, or are undergoing major changes. Speculative stocks appeal to ...
What is technical analysis in stock trading?
Technical Analysis is a method used by traders and investors to evaluate financial instruments like stocks, commodities, and currencies by analyzing historical market data—primarily price and volume. Unlike fundamental analysis, which examines a ...
What are the different types of mutual funds?
The Securities and Exchange Board of India (SEBI) has classified mutual funds into five main categories based on their investment instruments: Equity Schemes: These funds primarily invest in equity and equity-related instruments. SEBI has defined ...