F n O Market Basics

A futures contract allows you to buy or sell an underlying stock or index at a preset price for delivery on a future date. Options are of two types — call and put. A call option gives a buyer the right to purchase an underlying stock or index at a preset price during a contract’s liquid life — a month or also week in case of Bank Nifty.

A put option lets a buyer sell the share at preset price during the contract life. A call seller has the obligation to give delivery to the buyer at t ..