What is F&O?

What is F & O?

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) offer investors options in futures and options on stocks and indices. 

 

Futures contracts enable investors to buy or sell stocks at a fixed price for delivery at a later date. 

 

The call options available on the stock allow the investor to buy the common stock (underlying) for a certain price at a later date, on the other hand one put options enables you to sell the common stock. 

In general, the only difference in the FO segment is the difference between the buyer or the selling price between the buyer or the seller (buying or selling the stock and its return for potential profit).

- Futures contracts fixed positions such as price, quantity and time.

- The contract owner must buy or sell futures.

- Futures contracts maximum duration of 3 months trading cycle.

- 3 contracts will be available for investors for trading at any time.

- Each futures contract expires on the last Thursday of the month.

- Futures contracts to move faster than options based on futures contracts.



- Investors in options do not have the obligation to buy or sell the underlying asset at a specified date and price. 

Traders with options have the advantage of losing more than the initial investment.

- Options Contract The maximum duration of the contract is a trading cycle of 3 months.

- 3 contracts will be available for investors for trading at any time.

- Each options contract expires on the last Thursday of the month.

- There is less risk associated with options (s) than in futures contracts (F), a favorable outcome in a futures contract can adversely affect your position.




Risk of irreversible damage

Often experienced investors can try to avoid or reduce their losses by applying a call or options a day or two in advance. 

 

The abuse in this case is that sellers or writers try to charge a large premium to call such investors or keep them close to the result. 

That is, a person may end up paying a normal price twice or three times due to the presence of a higher amount, which is a factor influencing the options price (s). 

Eventually on the announcement of the results, the volatility is reduced and this reduces the cost of the option. 

This type of trade has the potential to cost the investor huge losses. Options (s) are also affected by time, the price decreases at a particular time and the investor must have incurred a high cost to put a call or down to make a profit.

What is full sort of F O?

Since the introduction of the derivatives or futures and choices (F;O) phase in 2000, it's mature exponentially in Asian nation.

Conclusion

Interested investors should try to do more research on various FOs, discussing their options with experts and monitoring price performance and delays under different conditions.

 An investor should be mindful when trading, buy at risk, sell on the grid ’and having a calm mind can benefit him or her well in making the right decisions.