I’m a retired person usually invest in equities now I want to invest through Future & Option trading as I’m now full day free.
I’m a retired person usually invest in equities now I want to invest through Future & Option trading as I’m now full day free.
5 Responses to “From Where I Can Know Basics Of Future & Option Trading In Nse? & Also Can It Be Done From Home?”
1. There is a huge difference between Investing and Trading. You invest in something expecting returns depending on the fundamental values that it gives, be it shares, business etc. On the other hand, trading is a short term activity where you buy something with a view that the price will go up and want to profit from it in the short term. Hence, never look at trading as an investment.
2. F&O Trading is generally a ‘Gearing’ product wherein you take exposure on stocks by paying a margin. This would mean that your returns can be very high and the loss can equally be very high. For eg. you can take a position in the future of a stock for say INR 10 lacs by giving a margin of say INR 1 lac if you expect the price of the stock to go up from say Rs. 45 (22,222 units) to say Rs. 47. When the price actually goes to Rs.47, your value becomes INR 10.44 lacs thus benefiting by 0.44 lac for an investment of Rs. 1 lac which is 44%. On the other hand, if the price goes down to say 43 the value of Rs. 10 lacs becomes INR 9.55 lacs resulting in a loss of INR 45K on an investment of Rs 1 lacs thus resulting in a total loss of 45%. Thus, it is a high risk trading activity owing to the gearing available through margins.
3. Like a strike rate for a cricketer, in a ball, one may have scored a six representing 600% strike rate. However, in a long innings, the strike rate comes down to normal levels as many balls will have to be left without scoring. Similarly, when in a particular trade or set of trades people may have made 300% or 400%, it is never sustainable. Worse still, while in cricket you give dot balls in which you don’t score runs, in trading, you will end up getting negative runs (returns) thus diminishing not just the returns, but sometimes capital as well. In fact, in the recent stock market crash, it is those who have had a geared position (either through F&O or through taking margin funding) who were the worst affected.
Hence, it is not advisable to look at F&O Trading as an investment. That too, being a retired person, such gearing can be extremely harmful if it has not been planned correctly including having a proper personal finance plan.
Assuming you are extremely well off and can afford to take this high risk, then there are enough places to get information on the same. Brokers like Karvy, Sharekhan etc. provide necessary details and there are enough websites as well.
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Fundu Vishy – Your ‘Mutual’ Friend
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i do not like to trade in future and option and think it is not for retail investors but if you want to learn about future and option so I give you a free link for download authentic e book about future and option by NSE in english hindi or gujrati
go to reliancemoney or motilal oswal outlets.
You can learn everything you want about options trading at your own pace for free online at http://www.optiontradingpedia.com
internet