It stands for "futures and options"
http://www.cftc.gov/opa/brochures/opafutures.htm
2007-04-21 04:21:27
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answer #1
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answered by dontknow 5
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Futures and Options F&O are called derivatives because they are derived from the primary instruments like stocks, bonds, commodities etc;
Futures:is a contract to buy or sell a certain quantity of the underlying security at a future date at a future price.
Options:It is a contract to buy or sell a certain quantity of the underlying security at a future date called expiration date at a future price called the exercise price.
There are two types of options, Put and Call. You can either buy or write(sell) options.
Call options when bought gives the buyer the right but not the obligation to buy certain number of shares at a future date at a future price.
Put Options:when bought gives the buyer the right but not the obligation to sell a certain number of shares at a future date at a future price.
Call option when writing or selling gives the seller the obligation but not the right to sell a certain number of shares at a future date at a futur price.
Put Option when writing or selling gives the seller the obligation to buy certain number of shares at a future date at a future price.
A transaction in options should contain at least one contract which is 100 shares.
This is the basic definitions, beyond this it will get complicated. You can go to www.888options.com and join an online tutorial to get into the different levels of options and trading expertise.
2007-04-25 06:42:31
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answer #2
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answered by Mathew C 5
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F= Futures
O= Options
These instruments were invented basically to hedge one's positions in the cash market. e.g suppose you have invested in some shares in large quantities for long term but in the short term the market may go down a bit. In such a scenario, you need to safeguard your position. You can sell "futures" or you can purchase "put option". If the market goes down, you may loss ( on paper- because you will be holding the shares for long term ) on your position in cash market but gain on "futures" / "put options" and the net losses will be restricted.
In India, national stock exchange and bombay stock exchange allows trading in futures and options.
This is a bit complex concept to understand and definitely not in this forum. You need to be in touch with somebody in your area and the person must be active in f&o trading.
Please do not indulge in f&o trading without understanding the concepts clearly. You may loss phenomenal money.
2007-04-23 03:53:14
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answer #3
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answered by Nitin G 7
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it is one form of investing in the shares of a company, by paying just a fraction of the amount invested, u commit to own those many shares and commit to square up your position within a particular period of time, for example, one month or two months
2007-04-21 11:31:06
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answer #4
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answered by SHABBEER 1
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that is futures & options scrips those can be traded with settlement date every last thursday of the month in NSE for moe details you can contact me batra_raghu@yahoo.co.in
2007-04-22 12:19:18
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answer #5
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answered by ragh b 1
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