Earn money from the stock market without buying shares, do you know this special method?

News Topical, Digital Desk : You might find it hard to believe that you can earn money from the stock market without buying shares, but it's true. You can earn money from the market without buying shares, and to do so, you need to engage in a special type of trading called F&O (Futures and Options) trading. This allows you to trade shares without purchasing them. Let us explain how.

What is F&O trading?

Futures and options fall under derivatives trading , colloquially known as futures trading. Significantly, this trading doesn't require the purchase of shares, as traders trade in futures and options contracts. Instead of buying stocks, they buy and sell contracts for different months.

How is trading done in F&O trading?

In F&O trading, there are two ways to trade: futures and options. Both contracts are available for three different months. Suppose you believe that a stock of Company XYZ, priced at ₹100, will rise and reach ₹110. Instead of buying that company's stock, you can purchase futures and call options (for a bullish bias). As the stock price rises, the value of your futures and options contracts will increase, allowing you to close the trade with a profit.

Importantly, in the F&O segment, you can bet on both up and down stock prices. If you believe a stock's price will fall, you can sell a futures contract and buy a put option (for a downturn).

Big business with less capital than F&O

Another advantage of futures and options trading is that it allows large trades to be made with small capital. However, the risk is also high.

Read More: Income Tax Refund: If this work is not done before December 31, the refund may be stopped, but understand why.