F & O

POSTED BY radhevajrakaya ON November 19, 2012 10:57 am ONE COMMENT

I would like to know few things,,,

There is TWO scenario , kindly tell among this two over the time say 5 years where will I get maximum return and following which route it will be a WEALTH BUILDER.

Scenario 1—Buying stocks in cash market worth Rs.10lakh and

Scenario 2—-Buying through F&O (in LOT) worth Rs.10 lakh. Here I mean to say both in Futures (LOT Rs.10lakh) and in Options (LOT Rs.10lakh). (But here what will happen after the EXPIRY to both future and option i.e F&O portfolio)

Basically F &O are for hedging i.e by taking a opposite position ONE can offset his loss.

Theory , says in CASH market the market value of investment almost will never be ZERO but it is not in the case of F&O . If it is so than how it can happen in F&O ,,, I have understood the BUY (CALL,PUT) part that the max loss is the premium . But I have not understood the SELL (CALL,PUT) part how can the person make UNLIMITED LOSS. Can’t the Person STOP his loss by closing his position here I understand that he has obligation is there no way OUT.

One reply on this article “F & O”

  1. Vikash says:

    Investment is done only in cash market.

    F&O is all about trading where you can make 100% profit in a week and can even lose entire capital within few days. There is no fool proof hedging technique where one can escape from losses. It’s very high Risk – High return.

    Obviously, Only chance of making money is by Investing in cash market for 5 years.

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