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Basic of Futures & Option

Futures are fungible contracts that obligate the writer to either buy or sell stocks or commodity on a forward date at a predetermined price. Traders often get involved in futures contracts to hedge against asset price changes.

Options are also financial contracts, but not obligatory. Options offer versatility and used in forming various trading strategies. Apart from that, futures are easier to understand and traded in a structured and deep market which adds to liquidity.

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