·       F&O trading is a type of financial derivatives trading that involves contracts based on the future prices of underlying assets.

·       These underlying assets can include various financial instruments like stocks, commodities, currencies, or indices.

·       F&O trading involves two primary types of derivative contracts: futures contracts and options contracts.

·       Futures contracts obligate the buyer to purchase and the seller to sell a specific quantity of an underlying asset at a predetermined price and date in the future.

·       Options contracts provide the buyer with the right (but not the obligation) to buy (call option) or sell (put option) an underlying asset at a predetermined price (strike price) on or before a specified expiration date.

·       F&O trading allows traders to control a more significant amount of the underlying asset with a relatively small amount of capital. This leverage can amplify both potential gains and losses.

·       While it offers opportunities for hedging and speculation, it also involves a higher level of risk compared to traditional equity trading.

Securities and Exchange Board of India (SEBI)

·       SEBI is a statutory authority in India responsible for regulating and supervising securities and financial markets.

·       It plays a crucial role in ensuring the fair and transparent functioning of various segments of the financial market, including stock exchanges, mutual funds, securities intermediaries, and credit rating agencies.

·       SEBI formulates policies, rules, and regulations to govern these entities and maintain market integrity.

·       It also mandates the registration and regulation of market intermediaries, such as brokers, sub-brokers, merchant bankers, and portfolio managers.

·       SEBI enforces disclosure requirements related to financial results, corporate governance, and insider trading to enhance transparency and protect investor interests in the financial markets.