Derivative Market

Futures market – contract made between buyer and seller with the agreed price and deal is executed at the settlement date mentioned.
Buyer get Rights to buy and for seller it is rights to sell. If the market price goes up, the profit is realised in buyer account on daily basis. If the price goes down, the seller get the profit in daily basis. Both have to give Caution deposit to exchange.
Option market – Call option – Buyer get rights to buy with no obligations.
Put Option – Buyer get rights to sell with no obligations. Premium has to be paid for seller.If the price goes down, seller has no profits because he has no rights. Only for premium the seller signed the contract.