Why the need to put up additional margin makes futures trading risky

Not only must your call be directionally right, the price movement must occur within a stipulated time frame for you to make money

According to media reports, officials of the National Stock Exchange (NSE) recently met the country’s biggest stock brokers to enquire whether there are adequate checks in place while on-boarding new investors into the derivatives segment.

When new investors entering the equity markets circumvent mutual funds, and even direct equities, and jump headlong into high-risk futures and options (F&O) trading, it is indeed a cause for alarm.

Aggressive tactics

Many brokers are offering schemes like Rs 500 cash back for opening a trading account. People who refer clients to brokers are offered incentives. Some brokers are crediting exchange-traded funds (ETFs) and