WHAT IS F&O AND MCX TRADING?
Introduction The stock market in India permits trading in two segments – the Futures and Options market and the cash market. It will be easier to explain what the Futures and Options market is through the following analogy. When you buy a product, you have two payment options – cash or credit card. Similarly, in the stock exchange, you pay the full price of the stock and take delivery of the shares in the cash segment. Suppose you buy 100 shares of X, and each share costs Rs 130, you pay Rs 13,000. When you use your credit card to buy something, you buy the object in the present and pay in the future. So, in the futures and options segment, the minimum number of shares you can buy is 1000, which is one lot. So, when you buy one lot, you do not have to pay Rs 1, 30,000 but a percentage of the amount, which is usually 10-20%. F&O trading meaning F&O trading means that you can buy more shares with less capital. If you wanted to buy the same number of shares in the cash mar...