Why Derivatives (F&O) ?
The derivative segment is a highly lucrative market that gives investors an opportunity to earn superlative profits (or losses) by paying a nominal amount of margin. Over past few years, Future & Options segment has emerged as a popular medium for trading in financial markets. Future contracts are available on Equities, Indices, Currency and Commodities. Derivatives do away with the need to invest a large amount of capital upfront and allowing you to benefit from market movements. This gives you greater liquidity than most other assets. They are an excellent avenue to help you leverage on anticipated market movements and an effective tool to hedge your risks, speculate and earn returns in a relatively shorter duration. You can trade in Futures – contracts or an agreement between two parties to either buy or sell a fixed quantity of assets at a particular time in the future for a fixed price OR Options – A similar contract, except the parties are not obligated to fulfill the terms of the agreement. These contracts are then traded in the market:
✅ Leverage
Enables you to get higher trading exposure with a low margin amount.
✅Hedging
Allows you to safeguard yourself against potential losses, by hedging your positions. As a part of this, you buy in the cash segment and agree to sell in the derivatives market or vice versa.
✅Risk Flexibility
Allows you to choose between conservative or high risk strategies based on the expected rise and fall of stock prices.
✅Higher Probability of Returns
Possibility to garner returns irrespective of market moving up, down or sideways.
