Norms of Trading

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News: SEBI has announced measures to limit individual trading in F&O segment and help investors to channel savings in productive areas.

1. Futures and Options (F&O): They are two varieties of financial derivatives which were introduced in India by National Stock Exchange (NSE) in June 2000.

2. F&O segment allows traders to speculate on future prices of stocks without owning them, making them susceptible to both gains and losses.

3. A futures contract obligates the buyer to purchase a specific asset and seller to sell that asset at a particular future date.

4. Types of Futures: A) Financial Futures B) Physical Futures

5. Whereas an option gives the buyer the right (but not obligatory) to buy or sell an asset at a specific price at any time during the life of the contract.

6. Types of Options: A) Call Options B) Put Options.

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By prashant shekhar

Helping aspirants connect the dots between current affairs and concepts— so you don’t just read more, you understand better.

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