Future and Options trading- Why it is so risky ?
Why future and options trading is risky and beginners are not advised to trade in it , if you don’t follow proper rules, If you don’t have proper knowledge about future and option trading then, it can ruined your all capital . People trade into future because they only need a margin to take their position, but they don’t realize that their one wrong trade can clear their all capital, after loosing their all capital they can not take any trade.
Future and Option trading example
Lets’s elaborate it with an example, suppose we choose a stock A and its current market price is 345 and its lots size is 1700 means its one lot have 1700 stocks, now to take a position we need to buy at least one lot, so if we buy it in cash then we need to pay 1700 * 345 = 586000 rupees
but if we take one lot of future then we only need to pay it margin which is 73554 rupees if we want to hold for positionally and only 36777 rupees if we take it only for intraday, but some people use cover and bracket order then they only need to pay around 22000, so here you can check how much it make differences, that attracts a large number of new traders to take position in future.