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Futures and Options make the major part of the stock market. Both Futures and Options are the product of Derivative segment. F&O came into place for the risk averse investors who were willing to enter the market only by minimizing the risk arising out of fluctuations in asset prices.
Future & Option Advisory
BSE is the originator for Derivatives in India, as it created history by launching exchange traded derivative in the year 2000 on 9th june. BSE commenced trading in Index Options on Sensex on June 1, 2001, Stock Options were introduced on 31 stocks on July 9, 2001 and Single Stock Futures were launched on November 9, 2002. MCX launched derivatives in Gold on the auspicious day of Dhanteras on 17th October, 2017.

Derivatives were the answer for risk averse investors. Derivatives became famous as they were able to partially or say fully transfer the risk by locking in prices, for the underlying asset, to be bought or sold in future.

Proof of the same can be witnessed on growing interest of retail investor into the derivative segment, amid edge of leverage it provides. In India, as per the data available, No. of contracts over derivatives in all segments, including stock future, index future and stock and index option, since the launch till date has grown by CAGR of 232.99%, where as turnover has grown up by 188%. Looking at the daily basis, daily average turnover including all the segments escalated by CAGR of 118.41%.