What are the advantages of F&O?

There are many advantages of trading in futures and options. Futures and Options(F&O) contracts have hedging, arbitrage and leverage benefits. Arbitrage: Arbitrage implies taking advantage of price differences in the same or similar financial instruments. Hedging: The most common use of derivatives trading is hedging. It’s possible to use Futures and Options(F&O) contracts to set up a trading strategy in which a loss for one investment is mitigated or offset by a gain in a comparable derivative. Margin trade: While trading in the derivatives market, you only pay a margin. This is because the actual value of the contracts would be too large in lakhs and crores. However, when you make a profit, the percentage of growth is exponentially higher. This allows you to make more money.