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The spot market, also known as the cash market or physical market, is a public financial market in which commodities or financial instruments are bought and sold for immediate delivery
The exchange plays a major role in derivative instruments like futures and options. In futures exchange will maintain refundable margin from both the parties ,and manages the trade. In options it deals with the premium for the deal and executes it.
Margin : A margin is collateral that the holder of a financial instrument hs to deposit to cover some or all of the the credit risk of their counter party
MTM : It is the abbreviation of Marked to Market. The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day.
Premium is money paid by the option buyer to buy either call/put option. The seller of the option contract collects the premium to sell the rights to the buyer of the call/put option.
Strike Price is the share price mentioned in future and option contracts. The settlement should be made at this price on the final day whatever the market price may be
Expiry Date is the last day that an options or future contract is valid.
Lot Size is the number of shares that is being traded
difference between futures contract and options is that a future is an obligation, whereas an option is the right (not necessarily an obligation).Futures contracts are generally larger than default option contracts.
Call option: A call option is an agreement that gives the option buyer the right to buy the underlying asset at a specified price within a specific time period.
Put option: A put option is an option contract giving the owner the right, but not the obligation, to sell a