How to Plan, Analyse and Execute Future and Options Trades | Motilal Oswal

How to Plan, Analyse and Execute Future and Options Trades

Futures trading and options trading is an integral part of the Indian financial markets. In futures trading, a trader agrees to either buy or sell certain assets at a specific price on a predetermined date. Here, the trader is obligated to do so. In options trading, however, traders can get the right to buy or sell a certain asset at a predetermined price on a specific date, without the burden of an obligation.

Before you trade in the derivatives market, it’s important to know how to plan, analyse and execute future and options trades. Once you understand this, you’ll find that it is easy to pick the right futures trading strategy or options trading strategy.

So, let’s take a closer look at how you can do this.

1. Perform adequate research

Research is important. It helps you plan your futures trading strategy or your options trading strategy in a more informed manner. These strategies differ from the ones you typically employ in the spot market. So, make sure to research the different aspects involved in FnO trading, like the premium, the expiry and the margin well in advance.

2. Account for the margin money

One of the greatest perks of options trading and futures trading is that you can deal in relatively huge trades by paying small margins. However, the margin money fluctuates based on the price of the underlying stock. You’ll to analyse this and ensure that you have adequate funds to meet your margin requirements.

 3. Study the market

Another huge part of planning and analysing for FnO trading is studying the derivative market as well as the spot market, since the movement of the price of the underlying asset will ultimately impact the prices of futures and options. Ideally, it’s important to analyse the micro and macro influencers that impact the market, so you can plan your trades accordingly.

 4. Choose the right strategy

There are different options trading strategies and futures trading strategies that you can choose from. Before you enter a trade, you’ll need to decide on the strategy. Protective puts, for instance, enhance profits on the downside. And covered calls can reduce the cost of holding.

Strangles come in handy in volatile markets. So, based on what you learned from studying the market, you can choose the right strategy.

 5. Execute your trade

Once this is done, all that remains is to actually execute your trade. Keep the expiry and the margin requirements in mind when you get around to executing the trade, since it is important to structure your trade right.


If you’re looking for some additional help with FnO trading, we have many trading platforms and tools that can assist you and make planning and strategy building easier. Our options trading platform, Sensibull, is one such useful tool. With Sensibull, you get advanced tools for analysing your trades and have access to the strategy builder function, which creates and analyses option strategies. Check it out to make your derivative trading smoother.

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