How to Make Your Living with Derivatives Trading?

 

Futures and Options (FnO) trading is a key part of the derivative market which has a high potential for making profits. Yet it also comes with substantial risks. You must have well-planned strategies and strict practices for managing risk if you want to be successful in F&O trading.


Developing a Trading Strategy

To earn money from trading in Futures and Options, it is essential to have a good strategy, knowledge about the market and continuous learning. Given below are a few strategies as well as some tips:


1. Understanding Derivative Contracts

F&O trading makes use of derivative contracts which are futures and options. Futures agreements enable the purchase or sale of the underlying property at a price agreed upon in advance for delivery at a later date.


2. Creating Short Positions in Equity Futures

In a bear market, it is often profitable to sell futures because they can decline steeply. This is the strategy of creating short positions in stock futures contracts by selling them in anticipation that their prices will fall.


3. Trading in Option Strategy and Option Spreads

Trading in option strategy and option spreads can be beneficial during high market volatility.


4. Protecting the Portfolio

Hedging is a strategy used in F&O trading to protect your portfolio from market volatility. It involves buying a Nifty Put or Bear Put Spread using monthly contracts or long-dated options.


5. Choose A Reliable F&O Trading

To start F&O trading, you need a derivative trading account with a reliable platform to easily buy and sell futures and options contracts, monitor market trends, and manage your portfolio.


Read More: https://www.insightssuccess.in/how-to-make-your-living-with-derivatives-trading/


Source: https://www.insightssuccess.in/ 


#DerivativesTrading #FuturesandOptions #FnO #F&Otrading #BusinessEMagazine

#BusinessMagazineIndia #TopBusinessMagazine #BestBusinessMagazine


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