Futures and Options trading is the trading in derivatives where the ‘contracts’ for the underlying asset are bought and sold. A ‘Futures’ is a contract to buy or sell an underlying asset at a fixed price at a specific time. Margin is the deposit or an amount of capital one needs to post or deposit to control/Own a futures contract.
If you buy an options contract, it grants you the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. A call option gives the holder the right to buy stock and a put option gives the holder the right to sell stock. An option premium is the income received by an investor who sells or “writes” an option contract to another party. An option premium may also refer to the current price of any specific option contract that has yet to expire. Premium is combination of Current price of asset and the time left for the expiry of the contract
Hi,
You did good work.
The appropriate answer to that question is
How option contract differ from the future contract?
An obligation to buy and sell the stock is different for F&O contract. A futures contract is an agreement between 2 parties to sell or buy an asset at a certain time in the future at a price decided.
But in the option’s In options contract, Call option buyer has right to buy with no obligation while Call option seller has an obligation to sell at the end of expiry. Put option buyer has the right to sell with no obligation while Put option seller has an obligation to buy.
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