Stock Market News, Derivatives (F&O) Segment: Four stocks are set to enter the derivatives segment on Dalal Street. According to stock exchange NSE, the following stocks will enter the futures and options (F&O) segments:
- 360 One Wam
- Amber Enterprises India
- Kfin Technologies
- PG Electroplast
When will the 4 stocks enter the F&O space?
The stocks will be available for trading through derivatives—or futures and options contracts—with effect from June 27, according to the bourse.
When are stocks added or removed from the F&O segment?
Stocks are added or removed from the F&O segment from time to time based on factors such as average market capitalisation (mcap)—also known as market value—and daily trading activity.
Who decides which stocks will be traded through futures and options contracts? Â
Capital market regulator Securities and Exchange Board of India (SEBI) has set certain rules that determine which stocks qualify for trading under the F&O segment.
These stocks are chosen from the top 500 listed companies by market value.
A stock must meet all the conditions mentioned on a six-month rolling basis in order to qualify for or get disqualified from trading in the F&O segment.
How many stocks are there in the F&O space?
Currently, there are around 200 stocks listed for trading in the F&O segment on Dalal Street.Â
What is the F&O segment? How does it function?Â
Traders are able to trade in the stocks available under the derivatives mode indirectly, through futures and options contracts, without having to actually own the securities.Â
These contracts allow market participants to speculate on the future price levels of underlying assets, like stocks in case of equity derivatives, without actually owning the asset.Â
These positions can be used to hedge against potential losses in an existing Dalal Street investment portfolio.Â
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