Sunday, 4 May 2014

How Profitable Is Futures and Options Trading



SEBI has imposed rigorous conditions on futures and options trading involving promoter of background check, net worth requirement, management, and market knowledge. Only once the various requirements are fulfilled, can a brokerage offer futures and options, followed by regular audits by exchanges. This kind of trading requires commitment and knowledge regarding how the system works in order to make the desired profits in the area. Simply trading is not enough because you need to track them on a continuous basis. Positional traders should commit 2-4 hours on a regular basis to learn the ropes and make informative decisions.

Regular research on the subject to remain abreast of the situation is extremely important in any kind of trading as also related to futures and options. Without investing, you won't be able to understand the limitations and make sure that you come from financially strong background. Only when you are financially viable will you be able to take risks and take losses in the stride to continue in the trading field. The best way to trade in futures and options is to do it the conservative way. Remember, while you can make great profits with such a trading platform you can use it fast too if you are not careful enough.

Ideally, the risks you take in investments related to futures and options trading should not exceed 15%-20% of the total investable capital. You should risk only the amounts you will be comfortable losing anything more than that and you will be playing with fire.

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