Two more stocks will be enter the country’s high-octane futures & options (F&O) segment from the March series, according to a stock exchange communication on Wednesday. This will be in addition to four entries announced earlier. Indian Renewable Energy Development Agency (IREDA) and Tata Technologies (TATATECH) will be available for trading in futures and options from the March series, according to an NSE circular.
On January 30, the stock exchange announced the addition of four stocks to the derivative segment: NBCC, Phenix Mills, Solar Industries and Torrent Power.
The current February series of derivative contracts is set to end on February 27.
The next monthly series—the March F&O series—will commence on Friday, February 28.
What are derivatives?
Trading in derivatives, or derivatives trading—as it is known in market parlance—is the buying and selling of financial contracts that derive their values from underlying assets, such as stocks, indices, currency pairs or commodities.
Derivatives trading enables participants to speculate the prices of underlying assets without actually owning them in their portfolios. This is what makes derivatives trading riskier than spot trading, which takes place in cash and leads to the actual delivery of the security.
Simply put, derivative contracts derive their prices from fluctuations in the prices of underlying assets.
SEBI has been educating investors about the risks associated with derivatives…
Capital market regulator Securities and Exchange Board of India (SEBI) has over the years conducted a number of studies and released a slew of reports highlighting the true risks involved in futures and options trading.
ALSO READ: “Don’t do intraday trading unless you have…”: Ajay Bagga’s priceless advice
Last year, SEBI released data from a study to point out the harsh reality of day trading.
Barring three, all others out of every 10 intraday traders incurred losses in FY23, the study found.
This is why many market experts have cautioned new investors from indulging in intraday trading.
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