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Futures & Options

What Are Futures & Options?

  • Futures: Contracts obligating buyer/seller to transact at a set price on a specific future date.
  • Options: Give the buyer the right (not obligation) to buy/sell at a fixed price; sellers must fulfill the contract if exercised.

Getting Started with F&O on Firstock

  1. Open a Firstock Trading & Demat Account
  2. Activate F&O Segment
    • Submit income proof (ITR, salary slip, etc.)
    • Accept risk disclosures
  3. Login & Trade
    • Search F&O contracts, fund your account, place orders
    • Monitor positions and square off before expiry if needed

F&O Activation Steps

  • Go to: My Profile > Segments > Enable F&O
  • Submit income documents and accept disclosures
  • Approval time: 24–48 hours

Option Chain & Market Insights

  • View Option Chain by searching for a stock/index and selecting “Option Chain”
  • Get data on:
    • Open Interest (OI)
    • Put-Call Ratios (PCR)
    • Implied Volatility (IV)
    • Support & Resistance zones

Risks in F&O Trading

  • Market volatility can cause unexpected losses
  • Liquidity issues affect order execution
  • Leverage can amplify losses
  • Options risks: Buying may lose entire premium; selling can incur large losses
  • Margin shortfalls may lead to auto-square off
  • Physical settlement obligations for ITM stock contracts at expiry

Lot Size Changes (Effective Nov 20, 2024)

 Lot Size Changes (Effective Nov 20, 2024)

Index

Lot Sizes

Nifty 50

75

Bank Nifty

30

FinNifty

65

Midcap Nifty

120

Nifty Next 50

25

Sensex

20

Bankex

30

Sensex 50

60

Expiry Rules

  • Nifty 50: Weekly & monthly expiry (Thursdays)
  • Sensex: Weekly (Tuesdays) & monthly expiry
  • Other indices: Only monthly expiry
  • ITM Options → Physically settled
  • OTM Options → Expire worthless

Common Trading Limitations

  • Strike Price Restrictions: Exchanges allow orders only at specific intervals (e.g., every 100 points)
  • Market Order Restrictions: Some contracts only allow limit orders due to liquidity/risk concerns

Physical Settlement Policy

  • ITM stock F&O: Requires actual delivery of shares or funds (T+2 settlement)
  • Index F&O: Cash settled

Rollover & Ban Periods

  • Rollover: Close expiring contract, open next series for same position
  • Ban Period: Triggered when 80% of MWPL is breached; only square-off allowed, not fresh positions

Corporate Actions Impact

  • Events like splits/dividends lead to strike price, lot size, and OI adjustments—automatically handled by exchanges

Visibility & Listing

  • F&O contracts are listed only for SEBI-approved stocks and indices. Non-listed stocks may not have F&O availability.

Key Terms

  • Open Interest (OI): Total number of unsettled contracts
  • Rollover: Extension of position from one expiry to the next
  • MWPL: Market-Wide Position Limit
What are Futures and Options (F&O)? How do I start trading in futures and options on Firstock? How do I activate F&O trading on the platform? How can I access the Option Chain on Firstock? What other insights does the Option Chain tool provide on Firstock? What are the potential risks involved in trading Futures and Options? What are the updated lot sizes for Index-based F&O contracts? What is Open Interest (OI)? Why have weekly expiries been discontinued for some F&O contracts? What is the new expiration schedule for index F&O contracts? What happens if an option position is not closed before expiry? Why are there restrictions on placing Nifty and Sensex option orders at certain strike prices? What is Firstock’s policy on physical settlement of equity derivatives at expiry? If an F&O position results in physical delivery, when will the shares reflect in my Firstock account? What does the term "Rollover" mean in F&O trading? How do I roll over an expiring futures contract to the next series? Why do some F&O contracts enter a ban period? Is it possible to roll over F&O positions when a stock is in the ban period? How do corporate actions influence F&O positions? Why are some F&O contracts not listed or visible for certain stocks? Why are market orders not allowed for certain index or stock option contracts on Firstock? What are the risks tied to the physical delivery of stock Futures and Options? How is the average buy price calculated for F&O trades? Why were funds deducted from my Firstock account after exiting a profitable short options position? What are the official trading hours of the Indian stock market? When are open intraday positions automatically squared off by Firstock? What are the timings and functions of pre-market and post-market sessions on NSE and BSE? What are the trading hours for a newly listed stock on its IPO debut day? What do the different groups on NSE and BSE mean? What does GSM mean? What is ASM (Additional Surveillance Measures)? What are large cap, mid cap, and small cap companies, and how to identify them? What is the BZ Category of stocks on NSE? How are shares settled in a BTST transaction? What happens when a stock is suspended? What are the risks associated with trading in securities under surveillance measures? Where can I see the stocks I hold that are suspended?
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