Future & Options
Features
Trade derivative instruments like futures and options on Indian stock indices and individual stocks, offering opportunities for both hedging and speculation.
Futures contracts let investors bet on future price movements of assets such as stock indices, commodities, and currencies.
Options contracts give investors the right, but not the obligation, to buy (call) or sell (put) an asset at a set price (strike price) within a specific time.
Use hedging strategies to manage portfolio risk and protect against unfavorable market moves, or engage in speculative trading for leveraged exposure to market price changes.
Questions about service
Options contracts provide the buyer the right (but not the obligation) to buy (call option) or sell (put option) an underlying asset at a predetermined price within a specified period. Options offer leverage, hedging capabilities, and potential for higher returns compared to trading the underlying asset directly.
Futures contracts are agreements to buy or sell an underlying asset (like stock indices, commodities, or currencies) at a predetermined price on a specified future date. They allow investors to speculate on price movements and hedge against risk.
Hedging involves using futures and options to offset potential losses in an existing investment. For example, an investor holding stocks might buy put options to protect against a decline in their value.
Risks include price volatility, leverage amplifying losses, time decay (for options), and the potential for substantial losses if market movements are adverse.
Unlike stocks, futures and options are derivative instruments that derive their value from an underlying asset. They offer opportunities for short-term trading, hedging, and leverage that are not typically available with direct stock investments.
Strategies include bullish (buying call options), bearish (buying put options), and neutral (using spreads) strategies, tailored to profit from specific market conditions or to manage risk.
To begin trading, you’ll need a trading account with our partnered brokerage firm (IIFL Securities) that offers derivatives trading. It’s essential to understand the basics, risks, and potential rewards before engaging in these markets.
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