List of F&O Stocks to Consider Trading 2025
Trading in the best F&O stocks offers a unique opportunity to maximise returns while leveraging market movements. However, the Nifty 50 F&O stocks list is vast, which can make selecting the right stocks challenging. With the insights of our research team, we at Samco Securities have curated a list of F&O stocks for trading. The list features 5 stocks with crucial F&O-related metrics like liquidity, open interest, and volatility as of December 6, 2024.
Scrip Name | Number of Contracts | Value in Lakh | Open Interest (L-1) | Open Interest (L) | Change In Open Interest | Applicable Daily Volatility | Open | High | Low | Close |
31535 | 139854.6925 | 193943 | 194579 | -636 | 0.0184 | 804.80 | 810.45 | 797.45 | 799.90 | |
8204 | 90988.74675 | 17114 | 17917 | -803 | 0.0233 | 242.15 | 248.49 | 242.15 | 243.97 | |
8960 | 44248.97375 | 114074 | 113432 | 642 | 0.0211 | 983.00 | 988.40 | 979.10 | 984.30 | |
8191 | 55267.0963 | 43060 | 43013 | 47 | 0.0292 | 517.70 | 521.10 | 513.85 | 517.15 | |
7713 | 25029.072 | 96050 | 95965 | 85 | 0.0385 | 8.30 | 8.30 | 8.02 | 8.08 |
Data as on December 2024
Tata Motors Ltd. (TATAMOTORS) experiences consistently high open interest and contract trading volume among the list of F&O stocks, which makes it ideal for capitalising on short-term market movements. As of December 6, 2024, around 31,535 contracts were traded, with a total trading value of Rs. 1,39,854.69 lakh. With such high liquidity and a daily volatility of 0.0184, Tata Motors Ltd. is one of the best F&O stocks, offering a balance between risk and reward.
A leading player in the mining industry, NMDC Ltd. (NMDC) is a major entity in the list of F&O stocks. As of December 6, 2024, a total of 8,204 contracts were traded with a trading value of Rs. 90,988.74 lakh. The stock also had a high open interest of 17,114 and a daily volatility of 0.0233, making it the perfect choice for speculative trading among the best F&O stocks.
IndusInd Bank Ltd. (INDUSINDBK) stands out among the best F&O stocks in the banking sector. The company’s predictable trends and high trading volumes are key factors that make it an excellent choice for traders aiming for steady returns. With a total of 8,960 contracts, a total trading value of Rs. 44,248.97 lakh, and a daily volatility of 0.0211 as of December 06, 2024, IndusInd Bank ensures manageable risk levels for traders looking for good entities in the Nifty 50 F&O stocks list.
Power Finance Corporation Ltd. (PFC) is a reliable entity in the list of F&O stocks. The stock recorded a total of 8,191 traded contracts with a value of Rs. 55,267.09 lakh and a strong daily volatility of 0.0292 as of December 06, 2024. The robust trading activity combined with good levels of volatility reflects strong trading dynamics among the best F&O stocks, which is crucial for effectively capitalising on market trends.
Vodafone Idea Ltd. (IDEA) is among the best F&O stocks due to its high volatility. As of December 06, 2024, the stock recorded a total contract trading volume of 7,713 contracts and a value of Rs. 25,029.07 lakh. Although the trading volume might appear low compared to the other entities in the list of F&O stocks, the stock’s daily volatility of 0.0385 makes it suitable for short-term traders seeking to capitalise on share price swings.
What are F&O Stocks?
Futures and Options (F&O) stocks are shares that are part of the derivatives market. For a company to be a part of the list of F&O stocks, it must be approved by stock exchanges for trading in derivatives like futures and options. Some of the criteria that exchanges consider to determine if a stock is eligible for F&O trading include liquidity, market capitalisation and compliance with regulatory norms.
By trading in F&O stocks, investors can hedge their portfolio risk or enhance their returns by speculating on future share price movements. However, F&O trading often comes with higher risks and requires a strong understanding of market dynamics.
Many traders prefer focusing on stocks from the Nifty 50 F&O stocks list, which includes the top 50 companies in the National Stock Exchange (NSE) in terms of market capitalisation. These companies are generally considered to be relatively stable, making them popular for F&O trading since it is easier for traders to enter or exit positions due to their high liquidity.
Choosing the best F&O stocks involves evaluating several factors ranging from liquidity and volatility to historical performance and market trends. Stocks with consistent trading volume and strong trends are often preferred choices for F&O trading.
How to Choose the Best F&O Stocks for Your Portfolio?
Identifying the best F&O stocks is crucial for minimising risks and maximising returns, especially in a volatile market. To find the best companies on the list of F&O stocks, you need to look for specific factors that are distinct characteristics of these shares. Here is a quick overview of how you can choose the right stocks for trading.
Look for Stocks with High Liquidity
When selecting from the list of F&O stocks, prioritise those with high trading volumes. Liquid stocks ensure effortless entry and exit from positions without significant price impact. Liquidity also reduces the bid-ask spread and enhances cost efficiency in trading.
Look for Stocks with High Volatility
Stocks with higher share price fluctuations often provide better opportunities for short-term gains. By analysing the Nifty 50 F&O stocks list for volatile yet fundamentally strong stocks, you can effectively combine profit potential with relative safety in trading.
Watch Out for Stocks on the F&O Ban List
Stock exchanges may, at times, ban some stocks from the list of F&O stocks due to a breach of market-wide position limits (MWPL). If the open interest for an F&O stock exceeds 95% of its MWPL, the exchanges will place a temporary ban. It is advisable to avoid trading in such stocks since restrictions can impact profitability and lead to unintended losses.
Analyse Sector Trends
The best F&O stocks often align with current sector trends. For example, if the IT sector shows growth, focusing on leading F&O stocks within that sector can yield favourable outcomes. To ensure success, you must always align your trades with the market cycles.
Evaluate Historical Performance and Stability
Study the past performance of stocks from the list of F&O stocks. Prioritise those with consistent returns, strong financials and stable management. Historical stability ensures reduced risk, even when markets become unpredictable or volatile.
What are the Benefits of Trading F&O Stocks?
Trading in the best F&O stocks comes with several advantages for a trader. You can find some of the most suitable stocks by studying the Nifty 50, Sensex and other broad market indices. Here are the top benefits of trading F&O stocks.
Hedging Against Risk
By initiating an offsetting F&O position in a stock they currently own, investors can effectively hedge their portfolios against market fluctuations. The offsetting position in futures or options can minimise potential losses and protect their investments during volatile periods.
Leverage for Higher Returns
Stocks in the Nifty 50 F&O stocks list allow traders to take larger positions with a smaller capital investment. This leverage amplifies potential returns, making F&O trading an attractive choice for those seeking higher profits within a shorter timeframe.
Flexibility in Strategies
The best F&O stocks provide flexibility to execute diverse strategies like straddles, strangles and calendar spreads. This allows traders to profit in varying market conditions, whether the share price is rising, falling, or remaining relatively stable.
Enhanced Liquidity and Volume
The entities in the Nifty 50 F&O stocks list usually have high levels of liquidity and volume. The robust trading volume ensures smooth order execution, reduced slippage, and fair pricing. This creates a favourable environment for both short-term and long-term trades.
Potential for Short-Selling Profits
Traders can benefit from falling markets by initiating short positions in some of the best F&O stocks. This strategy can be particularly useful during bearish trends, where investors can generate profits by selling at a high and buying back at a lower price.
What are the Risks of Trading F&O Stocks?
By monitoring the Nifty 50 F&O stocks list, you can find many trading opportunities. However, you must be aware of the following risks to avoid unnecessary or unexpected losses.
High Leverage Can Amplify Losses
While leverage is a key feature of F&O trading that can enhance profits, it also increases risks significantly. Even a small adverse share price movement could lead to significant losses, especially for traders without adequate risk management or market knowledge. Traders must adopt a cautious approach when initiating positions in the list of F&O stocks.
Market Volatility Adds Uncertainty
Even stocks from the Nifty 50 F&O stocks list are not immune to unexpected market volatility. Sharp share price movements can lead to unpredictable outcomes and make it challenging for traders to manage positions effectively or maintain their profit targets.
Risk of Overtrading
Traders often overtrade on the best F&O stocks in the hopes of chasing quick profits without proper planning. This behaviour can lead to poor decision-making and ultimately erode capital through a combination of excessive transaction costs and negative performance.
Margin Calls and Liquidity Risk
Traders must deposit a margin to initiate a position in the list of F&O stocks. If the share prices move adversely, stock brokerages may trigger additional margin calls. Failure to meet these calls can result in forced liquidation and lead to significant financial losses for traders.
Complex Strategies Increase Errors
While the Nifty 50 F&O stocks list is popular for advanced strategies, their complexity can confuse inexperienced traders. Misunderstanding strategies or misinterpreting market trends can lead to poor execution, compounding losses rather than generating profits.
Leave A Comment?