Derivatives
Also called Futures and options (F&O)
Contracts, like futures and options, whose value comes from a share, index or other asset.
Derivatives are contracts whose value comes from something else, like a share or a market index. The common ones are futures and options, or F&O. They use leverage, which magnifies both gains and losses, and SEBI’s August 2026 study found most individual traders lose money in them. Our F&O explainer has the numbers.
Questions people ask
What are futures and options?
A future is a deal to buy or sell at a fixed price on a fixed date. An option is the right, but not the duty, to buy or sell at a fixed price before a date. Both are derivatives: their value comes from a share or index.
Why are F&O risky?
They use leverage: a small amount controls a big position, so small price moves cause big gains or losses. SEBI found 87.7% of individual traders in equity derivatives made a net loss in FY26.
What does F&O stand for?
F&O stands for futures and options, the two main kinds of exchange-traded derivatives in India.
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