Futures and options segment meaning
It is applicable only on stocks that are part of futures and options. It is futures and options segment meaning applicable on index derivatives. The next most important question that arises in the minds of the traders or investors is that when the scrip is in the ban, does the trading stops? Well, the answer is no.
During the period when the scrip is in the ban, the traders can trade in that security only to decrease their position in the stock. This is done through off-setting the position futures and options segment meaning the normal trading is resumed in the stock. To put in other words, the traders are allowed to take intraday positions as futures and options segment meaning does not alter the open interest.
However, the traders are not allowed to take positions in form of new or fresh contract. But, if someone takes a fresh position, then there is a penalty to it.
Any new addition in open positions shall attract a penalty of Rs. Therefore, the consequences must be known before taking any new futures and options segment meaning in the security during the ban period. When the stock is in the ban, trading in the derivative contracts is allowed only to reverse the position that is held by the trader.
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How are Stock Futures and options segment meaning different from Stock Options? In stock options, the option buyer has the right and not the obligation, to buy or sell the underlying share. Risk-return profile is symmetric in case of single stock futures whereas in case of stock options payoff is asymmetric.
Also, the price of stock futures is affected mainly by the prices of the underlying stock whereas in case of stock options, volatility of the underlying stock affect the price along with the prices of the underlying stock. What are Stock Futures? How are Stock Futures priced? What are the opportunities offered by Stock Futures?
How are Stock Futures settled? Can I square up my position? When am I required to pay initial margin to my broker? Do I have to pay mark-to-market margin? What are the profits and losses in case of a Stock Futures position? What is the market lot for Stock Futures? Why are the market lots different for different stocks? What are the futures and options segment meaning contract months available for trading? What is spread trading on BSE?
As an investor, how do I start trading in Stock Futures? What securities can I submit to the broker as collateral? How does an investor, who has the underlying stock, use Stock Futures when he anticipates a short-term fall in stock price? How can an investor benefit from a predicted rise or predicted fall in the price of a stock?
What is pair trading?