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What is F&O Segment

F&O Segment

Sai intraday tips provides accurate F&O trading tips for day traders and also provides follow up of those tips via sms till the call is open. Trading in F&o Segment is a derivative based trading where stocks are bought in lot. In fact future trading is a contract that comes with a time frame that means you have to sell that stock within that stipulated time frame.

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F&O segment was launched in June 2000 on the National Stock Exchange (NSE). This trading has gained fast popularity in India and its traders. At present, more than 30 to 40 Lakh contracts valued at almost Rs 50,000 crore are traded on the NSE every single day.

F&Os are the two popular derivatives instruments traded on stock exchange. While in a futures contract, you agree to buy or sell shares at a certain price in the future, the option contract gives you the right, but not an obligation, to buy (through a call option) or sell (through a put option) the underlying scrip at a specified date and at a specified price.

Futures and Options are derivative instruments traded in national stock exchange. The instrument has no independent value, but it is derived from the value of the underlying asset/ stock traded in the cash market. The asset could be securities, commodities or currencies. Its value varies with the value of the underlying asset. The contract or the lot size is fixed for every F&O Stock traded in Nse. A Nifty futures contract has a lot size of 50 stocks.

Futures Contract

Future Contracts means stock traders agree to buy or sell the underlying security at a 'future' date. If you buy the futures contract, you promise to pay the price at a specified time i.e. expiry. If you sell it, you must transfer it to the buyer at a specified price on its expiry.

Why traders Trade in F&O Segment

A Trader Trading in F&O segment needs less capital as he pays pay only margin money (5-20 per cent of the contract). However only high net worth individuals trade in F&o Segment.

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Tips for all beginners in F&O trading

  • Trade with the market trends, don't try to pick stocks at tops or at bottoms.
  • Calculate the risk/reward ratio before taking a trade
  • Use technical signals (charts)
  • Trade with a plan – not with hope, greed, or fear.
  • Never add to a losing position i.e don't average in losses

Advantage Of F&o (Future & Options) Segment

  • Low Capital Requirement for Trading
  • Holding the Position for a Month.
  • Low Brokerage for Trading in F&O Market
  • Short Selling in F&o Market can be done.

We want everybody in India to be successful in the stock market and earn money. We are always here to help you in intraday trading and to provide you knowledge about share market. In the above article we have tried to explain the futures and Options segment in nse share market. We keep updating this article and add more information about the same. If you have any query related to our share tips services please feel free to contact us on 09619373554 / 09586669678 or read our Frequently Ask Questions for more information.

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