Spot / Cash Market is where trading (Deal & Settlement) is executed on the same day. It is an Intraday Trading.
FUTURES:
In Futures, the exchange gets margin from both Buyer and Seller. It does the mark to market (MTM) on the expiry date where it makes the settlement for the deal made between them.
OPTIONS:
In options, premium will be paid to the Seller and the Buyer alone gets the Rights. It does the mark to market (MTM) on a daily basis and makes sure about the final settlement.
MARGIN – The amount paid to the exchange by both Buyer and Seller to sign the futures. Margin is refundable.
MTM – It is Mark to Market. It is a day to day settlement at the end of each trade day. Risk & Return are realized on a daily basis by the price movement.
PREMIUM – An amount paid to the Seller of the contract for signing the option contract where Buyer alone gets the Rights.
STRIKE PRICE – The Agreed price for which the Deal has been signed.
EXPIRY DATE – It is the Maturity date of the contract.
LOT SIZE – Number of shares to be traded in the contract.
OPTIONS:
In Options contract, only the Buyer gets Rights to Buy & Sell with no obligations. Whereas the Seller will be given a Premium for signing the Option contract.
FUTURES:
In the Futures contract, both the Buyer & Seller will be given Rights to Buy & sell stocks at the agreed price. Margin has to be paid by both of them which is refundable.
CALL OPTION:
It is a contract where the Buyer gets the RIGHT TO BUY the stock at the Strike price on the Expiry date with no Obligations.
PUT OPTION:
Whereas the Buyer gets the RIGHT TO SELL the stock at the Strike price on the Expiry date with no Obligations.
PHYSICAL SETTLEMENT:
In Physical
