24 July 2008
Forward contract means the contract for purchase or sale of certain goods(scrip or commodity) to meet out the obligations on a future date or the performance whereof is deferred to a future date.
Hedging: Headging means the trading in F&O segment whereby future contracts for the sale of the scrips or commodities in hand are made to cover the risk of price fluctuations over the period they are ultimately consumed. Basically it covers the price fluctuatations over the period of retension of such scip/goods.
Speculation: These are the trades of sale and purchase with an intension to make the profit in a short duration of time and take the benefit of price difference at two moments or in two markets. Trades in F&O Segment without the stock of underlying security are speculative transactions. The material related to F&O or Derivatives is available at www.nseindia.com and various othersites linked with google. The various other terms of the securities markets can be read from www.chartinfo.com
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