Spot market is buying and selling shares at prevailing market prices. It is called as Equity market to differentiate from Futures and Options market. Role of exchange in derivative instruments is to ensure settlement is done by both parties at agreed prices in future dates. Option contract gives only the right but not the obligation for the buyer of the contract to execute at future date, but future comes with obligation to be executed. Call option is right to buy and put option is right to sell.

1 Comment
  1. vignesh 5 years ago

    your answers are well framed and appropriate.

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