F&O
* What is future price ?
the price of a stock or commodity on a futures contract —contrasted with spot price.
* What is spot price ?
the spot price is current price in the market at which given equity, commodity, or currency can be traded at the price.
* What are future and options ?
A future is a right and an obligation to buy or sell an underlying stock (or other assets) at a predetermined price and deliverable at a predetermined time.
and the Options are a right without an obligation to buy or sell equity or index.
* What is forward contract ?
A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
* What are the product available for trading in F&O ?
In F&O contract are traded on indices and in single stocks.
*Why future and options ?
lets learn about future first,
If you want t buy 200 stocks of Britannia at a price of 3000rs you will need a investment of rs.620000, so in future you can buy 1 lot of Britannia stocks and you need to pay only 15 to 20% of the total investment needed
that mean you will get profit 5X
another side risk will be also 5X
now come to the options,
you can buy Britannia 3100 call at the premium of 50rs and lot size is 200 shares , your investment is 10000rs if Britannia share goes down side your risk will be maximum 10000rs and profit will be unlimited on upside move.
* Benefits of trading in F&O ?
make big profit with minimum amount of capital risk
low transaction cost
liquidity
derivatives markets are lead economic indicators.
thank you.
* What is future price ?
the price of a stock or commodity on a futures contract —contrasted with spot price.
* What is spot price ?
the spot price is current price in the market at which given equity, commodity, or currency can be traded at the price.
* What are future and options ?
A future is a right and an obligation to buy or sell an underlying stock (or other assets) at a predetermined price and deliverable at a predetermined time.
and the Options are a right without an obligation to buy or sell equity or index.
* What is forward contract ?
A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
* What are the product available for trading in F&O ?
In F&O contract are traded on indices and in single stocks.
*Why future and options ?
lets learn about future first,
If you want t buy 200 stocks of Britannia at a price of 3000rs you will need a investment of rs.620000, so in future you can buy 1 lot of Britannia stocks and you need to pay only 15 to 20% of the total investment needed
that mean you will get profit 5X
another side risk will be also 5X
now come to the options,
you can buy Britannia 3100 call at the premium of 50rs and lot size is 200 shares , your investment is 10000rs if Britannia share goes down side your risk will be maximum 10000rs and profit will be unlimited on upside move.
* Benefits of trading in F&O ?
make big profit with minimum amount of capital risk
low transaction cost
liquidity
derivatives markets are lead economic indicators.
thank you.
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