The first and foremost thing to understand, before you step into the complex and fast-paced world of derivatives (futures and options), is risk management. Dealing in futures and options segments is not just about managing your buy or sell orders, but rather collating valuable market data to devise your actionable strategy in a risk-hedged manner. Whether you are considering the Sensex option chain, the commodity option chain, or stock-specific data, being efficient in the language of derivatives is essential before you execute your first trade in this segment.

Capital market regulator SEBI has, over time, released data collated in several studies and surveys highlighting the risk associated with fast-paced financial products such as derivatives, in order to protect the small investor.

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