Futures & Options
Trading is a full-time job, unlike investing. It offers opportunities in a variety of assets. You can trade almost anything in the open market, from equities to commodities and forex, via derivatives trading or directly. Derivatives are short-term financial contracts that derive value from an underlying asset and include an expiry date. These underlying assets can be stocks, commodities, interest rates, or forex. Futures and Options are the two most common types of exchange-traded derivatives. Here’s everything you need to know about futures and options trading.
Open Free Demat Account
What are Futures and Options Trading?
Futures and Options are types of exchange-traded derivatives. F&O trading means getting into a contract with another party for trading a stock or index at a pre-determined price at a future date. Futures and options are two derivative products where traders buy or sell an underlying asset at a given price. A contract buyer profits when the price rises, and a contract seller benefits when the price declines. In the opposite price movement, the trader has to accept the loss. When trading futures contracts, traders must deposit a certain percentage of the future value with the broker as a margin to execute the trade. To purchase an options contract, the buyer must pay a premium. You can invest in FnO stocks, commodities, interest rates, or currencies.