NSE To Introduce F&O Contracts On Ireda, Tata Technologies From Feb. 28

The National Stock Exchange on Wednesday said it will introduce futures and options contracts on Indian Renewable Energy Development Agency Ltd. and Tata Technologies Ltd. from Feb. 28.

The move is subject to eligibility conditions, the exchange said in a circular, adding that it will announce details of market lot sizes, strike price schemes, and quantity freeze limits on Feb. 27.

This followed NSE’s earlier decision on Jan. 30 to add NBCC, Phoenix Mills, Solar Industries, and Torrent Power to the derivatives segment. With these additions, traders will have more stocks available in the F&O market from Feb. 28, which marks the beginning of the March series. The February series will conclude on Feb. 27.

Futures and options are derivative contracts, meaning their value is linked to an underlying asset, such as a stock. Unlike direct equity investments, where investors buy and hold shares, F&O contracts allow speculation on price movements without owning the stock itself.

A futures contract requires the trader to buy or sell the asset at a predetermined price on a set date. An options contract gives the right—but not the obligation—to buy or sell at a specific price. These instruments are often used for hedging against price fluctuations, but they also involve higher risk due to leverage, which allows traders to take larger positions with less capital. Losses can exceed the initial investment if market movements go unfavourably.

A Securities and Exchange Board of India study published in September 2024 found that 40% of traders in the F&O segment during the fiscal 2023-24 were under 30 years old. The study also revealed that over half of all F&O traders came from Maharashtra, Rajasthan, Gujarat, and Uttar Pradesh.