Futures and Options 📊

Understanding Futures and Options 📈

Futures and Options (F&O) అనేవి derivative instruments underlying assets price movements మీద based. FinViraj.com experts ప్రకారం, ఇవి hedging, speculation, arbitrage కోసం use చేస్తారు. Stock exchanges లో standardized contracts గా trade అవుతాయి limited capital తో large exposure possible.

Futures vs Options Comparison 🎯

Futures Contracts:

FinViraj.com futures features:

• Obligation: Buy/sell చేయాల్సిన compulsion
• Margin: Both parties margin pay చేయాలి
• Risk: Unlimited profit/loss potential
• Settlement: Daily mark-to-market

Options Contracts:

• Right: Buy/sell చేసే అధికారం (obligation కాదు)
• Premium: Buyer premium pay చేస్తాడు
• Risk: Buyer limited risk, seller unlimited
• Exercise: Choice to exercise or let expire

Types of F&O Contracts 🚀

Index Futures & Options:

FinViraj.com popular contracts:

• Nifty 50: Lot size 50 units
• Bank Nifty: Lot size 25 units
• Sensex: Lot size 10 units
• Fin Nifty: Lot size 40 units

Stock Futures & Options:

Individual company shares మీద F&O contracts. Large cap stocks లో mainly available.

Commodity F&O:

Gold, silver, crude oil వంటి commodities లో futures & options.

How F&O Trading Works? ⚙️

Contract Specifications:

FinViraj.com details:

• Expiry: నెల చివరి Thursday
• Settlement: Cash settlement
• Margin: SPAN + Exposure margin
• Lot Size: Fixed quantities per contract

Margin System:

• Initial Margin: Position open చేయడానికి
• Maintenance Margin: Position hold చేయడానికి
• Mark-to-Market: Daily P&L settlement

F&O Trading Strategies 📊

Basic Strategies:

FinViraj.com beginner strategies:

• Long Futures: Bullish view (buy futures)
• Short Futures: Bearish view (sell futures)
• Call Buying: Limited risk bullish strategy
• Put Buying: Limited risk bearish strategy

Advanced Strategies:

• Covered Call: Stock + Call selling
• Protective Put: Stock + Put buying
• Straddle: Call + Put same strike
• Strangle: Call + Put different strikes

Spread Strategies:

FinViraj.com advanced techniques:

• Bull Call Spread: Limited risk/reward bullish
• Bear Put Spread: Limited risk/reward bearish
• Calendar Spread: Different expiry arbitrage

Benefits of F&O Trading 💡

Leverage:

తక్కువ capital తో large positions possible. FinViraj.com analysis: 10-20% margin తో full exposure.

Hedging:

Existing portfolio protect చేయడానికి opposite F&O positions.

Flexibility:

Multiple strategies different market conditions కోసం available.

Liquidity:

Major F&O contracts high liquidity provide చేస్తాయి.

Risks in F&O Trading ⚠️

Leverage Risk:

FinViraj.com warning: High leverage losses amplify చేస్తుంది rapidly.

Time Decay:

Options premium time pass అవుతుంటే decrease అవుతుంది.

Volatility Risk:

Implied volatility changes option premiums significantly affect చేస్తాయి.

Assignment Risk:

Option sellers కి unexpected assignment risk ఉంటుంది.

Risk Management 🛡️

Position Sizing:

FinViraj.com rules: Portfolio యొక్క 20-30% మాత్రమే F&O లో allocate చేయండి.

Stop Loss:

• Futures: 2-3% of position value
• Options: 50% premium loss వద్ద exit
• Time Stop: Expiry week ముందు exit

Diversification:

Different strategies, expiries, underlying assets లో spread చేయండి.

Tax Implications 📋

Business Income:

FinViraj.com tax analysis: F&O trading business income గా treated, speculative business కింద.

Audit Requirements:

Annual turnover ₹2 crores మించితే tax audit mandatory.

Loss Set-off:

Speculative losses only speculative gains against set-off possible.

Common F&O Mistakes 🚫

FinViraj.com identifies mistakes:

1. Over-leveraging: Excessive position sizes
2. No Stop Loss: Risk management neglect
3. Time Decay Ignore: Options premium erosion
4. Assignment Surprise: Seller obligations misunderstanding
5. Emotional Trading: Fear/greed based decisions

F&O Success Tips 🏆

FinViraj.com guidelines:

1. Start with paper trading practice
2. Understand Greeks (Delta, Gamma, Theta, Vega)
3. Monitor expiry calendar carefully
4. Use appropriate strategies for market view
5. Maintain strict risk management

Learning Path:

• Basic derivatives concepts
• Options pricing models
• Volatility understanding
• Strategy implementation
• Risk control techniques

Technology & Platforms 💻

FinViraj.com recommended tools:

• Trading Platforms: Advanced F&O features
• Option Chain: Real-time data analysis
• Greeks Calculator: Risk parameter monitoring
• Strategy Builder: Multiple leg orders

F&O sophisticated instruments అవుతాయి proper education మరియు practice తో profitable. FinViraj.com లో ఇలాంటి derivatives trading strategies కోసం regular గా visit చేయండి! 🚀