A brief on futures and options

Trading in futures and options is dealt in this chapter. Futures are trading in a stock or commodity where the deal takes place in the present and the settlement takes place in a future date. In dealing with futures, both the buyer and seller have rights and obligations. There is no premium. The settlement is on day to day basis. However at the expiry the deal has to be finally settled.
In options there are two type. In call option where the buyer has the right to buy and has no obligation. The seller has no right to sell but has the obligation to sell.
In Put option the buyer of the contract has the right to sell and has no obligation. The seller has no right by has the obligation to buy.
In both cases the seller of the contract is paid a premium.