What are the risks of trading futures and options (F&O)?

Several substantial risks can occur when trading in F&O, including:
 

● High Volatility: The price of an asset can move suddenly and drastically over a very short time frame.

● Leverage Risk: Since you are only paying for margin, the potential for large gains or losses stems from small market moves.

● Time Decay: If the stock price does not move, the value of your option will gradually erode as the expiration date approaches.

● Margin Calls: If the market moves against your position, you may receive a margin call from your broker to put up more money in your account.
 

Example: Once you have committed capital of ₹1.5 lakh, buying Nifty Futures will expose you to large losses since a 2–3% drop in the index is not very uncommon.