PLEASE HELP-NEW TO Futures & Options

[navino87]

Hi Guys,

I am trading in equity for more than a year...

I dono Wat Futures & Options is all this time... My friend said he is earning much from Futures & Options... Now i am interested in knowing wat Futures & Options is...

Can someone help me on Futures & Options in simple way???? If possible give an example...

Also is it true tat earning will increase while trading with Futures & Options???

 

[rajeshn2007]

hi,
it would be better , if you avoid futures and options. if you want to know about there are many websites available. but don't trade in it.
i trade in cash market only. this is my personal view, after seeing many people loose money heavily by trading in futures and options. futures is levaraged product and there is a high probablity of loosing money than gaining.
take your own decision.

 

[navino87]

Thank a lot man...

But, wat is Futures & Options in simple words???

How does it defer from equity trading???

 

[swagat86]

Hi Guys,

I am trading in equity for more than a year...

I dono Wat Futures & Options is all this time... My friend said he is earning much from Futures & Options... Now i am interested in knowing wat Futures & Options is...

Can someone help me on Futures & Options in simple way???? If possible give an example...

Also is it true tat earning will increase while trading with Futures & Options???

http://content.icicidirect.com/learning/university.htm


Thanks

 

[puch]

Hi Swagat,

Well my advice to you would be dont trade Options if you have a View on the Underlying Market. For Eg: Suppose you think Bharti Shares are going to rise in the next two months; then the logical thing would be to buy Calls Right?? Wrong!!! If you ever have a view on the Underlying Market always buy the Underlying; i.e Bharti Shares or Futures; dont ever buy Options coz your risk will be too much. Options are pure volatility trading instruments; if you think Volatility in the Market is going to rise then by all means buy Options but always remember to Hedge Yourself. We call this Delta Hedging in the Options Trading world. I am an Options Trader and have been trading Volatility for the last two years. In my opinion buy options two weeks before Results Announcements of Major Companies; this is mainly because of the Spike in Volatility at this time; but remember to hedge yourself always!!

Thats my opinion. Would like to hear back from other guys on this Forum about their views.

 

[swagat86]

Hi Swagat,

Well my advice to you would be dont trade Options if you have a View on the Underlying Market. For Eg: Suppose you think Bharti Shares are going to rise in the next two months; then the logical thing would be to buy Calls Right?? Wrong!!! If you ever have a view on the Underlying Market always buy the Underlying; i.e Bharti Shares or Futures; dont ever buy Options coz your risk will be too much. Options are pure volatility trading instruments; if you think Volatility in the Market is going to rise then by all means buy Options but always remember to Hedge Yourself. We call this Delta Hedging in the Options Trading world. I am an Options Trader and have been trading Volatility for the last two years. In my opinion buy options two weeks before Results Announcements of Major Companies; this is mainly because of the Spike in Volatility at this time; but remember to hedge yourself always!!

Thats my opinion. Would like to hear back from other guys on this Forum about their views.

 

[beginner_av]

 

[swagat86]

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[maharam1956]

Interesting information about F & O

 

[swagat86]

me too new to F&O
i want to know what exactly leverage is in futures.
suppose i have 10000 cash and want to trade in nifty futures can i do it?
how much margin is thr in ane scrip or nifty.
pls explain with a example

Sorry for late reply. the leverage depends very much on the broker. Like ICICI charges approx 54000 for one lot of futs.


Since u mentioned that ur new, just one small piece of advice. pls read details abt futures before u go into trade. Terms like MTM, Margin Call etc and their meaning and implication is very important to know. Or else ul burn ur hands.



thanks