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RupeeCase Learn/Path 12/Beginner

Derivatives Basics and Rules

Why futures and options exist, who trades them in India, contract specifications, margins, costs, SEBI's loss studies, tax and the red flags.

  • 9modules
  • 72 minof reading
  • 30question path test
  • Freewith a certificate
Start at 12.1See the stops

01The line

9 stops, 9 live.

Start here before a first F&O trade. What a derivative is for, how an NSE contract is specified, what a trade costs, and what SEBI's own studies found about who makes money.

0of 9 done on this device

  1. 12.1Why derivatives exist: forwards, futures and options in one storyA price fixed today for a trade later. Three versions of the same promise, and what each one adds8 min
  2. 12.2India's F&O market map: exchanges, clearing, SEBI and who tradesSEBI, the exchanges, the clearing corporations and your broker, and which categories of traders sit on each side of the market8 min
  3. 12.3Read SEBI's loss studies before your first tradeTwo SEBI studies of the same traders, one on the money and one on behaviour. Who is counted, what is measured, and what the numbers cannot tell you8 min
  4. 12.4Contract specs that matter now: lots, expiry days, strikes and settlementLot, expiry day, strikes, tick and settlement: what each means, what changed since 2024, and how to check a date before you trust a number9 min
  5. 12.5Margins without jargon: SPAN, exposure, expiry day margin and upfront premiumWhat the exchange holds against a position, layer by layer, and why the margin on a broker screen is the least capital a trade needs, not the most it can cost8 min
  6. 12.6The real cost of a trade: STT, exchange fees, SEBI fee, GST and stamp dutyFive collectors sit on every round trip. Which charge is large, which are not, and what a round trip costs before any profit7 min
  7. 12.7Position sizing and risk of ruin for F&O beginnersSize is the one input a trader sets alone. How it turns a small edge into ruin or a small loss into a slow bleed, and why a lot is a block8 min
  8. 12.8Red flags in F&O: tip groups, too good claims and registration checksWho is speaking, what is promised, what is attached, who is paid and whether it can be checked, using SEBI's own rules and one dated chain7 min
  9. 12.9Behaviour in F&O: loss chasing and what SEBI's behaviour study foundWho kept trading after a loss, who lost again, and what a bigger stake does to the odds of ruin9 min, path test
  10. 11.2How F&O is taxed: business income, ITR, turnover, audit and lossesTaught in module 11.2, Tax Treatment: MFs, ETFs, SGBs, Bonds & F&O11 min

02Outcomes

What you will be able to do.

  • 01Say what a future and an option promise, and who is on each side
  • 02Read an NSE contract specification: lot size, expiry day and settlement
  • 03Add up the full cost of an F&O trade: STT, exchange charges, stamp duty and GST
  • 04Explain what SEBI's studies found about individual F&O traders, year by year

03Certificate

Pass the path test.
Keep the proof.

  1. 1Read the modules and try each quick check (optional)A pass gives that module's own certificate
  2. 2Take the 30 question path test21 correct to pass, drawn from 135 questions
  3. 3Get the certificateWith an ID and a QR code
Jump to the path test About the certificates

04Questions

About Path 12.

What does Path 12, Derivatives Basics and Rules, cover?

Why derivatives exist, the Indian F&O market map, NSE contract specifications and lot sizes, margins, the full cost of a trade, how F&O income is taxed, and what SEBI's studies found about individual traders.

Do I need any F&O experience to start Path 12?

No. It assumes you know what a share and an index are, which Path 1 covers, and module 6.6 gives the short version of futures and options first.

Is Path 12 advice on what to trade?

No. It is free education. Every example uses NSE end of day data at least 30 days old, and no page says what to buy, sell or hold.

Explore next

Where to go next.

Before this pathPath 01: Market FoundationsBeginner, 6 modules Before this pathModule 6.6: Derivatives, Futures and Options for the Systematic Investor9 min, Path 06 Pillar guideDerivatives and Quant115 modules F&O on RupeeCaseHedging only, in developmentProtection for a portfolio you own, by a published rule

Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.