Derivatives market facilitates future trading with minimum capital investment. Spot market involves transfer of ownership of equities which leads to huge capital investment. But derivatives market provides the opportunity to trade in huge quantity with limited investment. It also gives the unique benefit of trading in indices (nifty, banknifty) which is not available in spot market.
Future contracts give rights ( to buy or sell underlying asset) but also obligation whereas options contracts gives right (to buy or sell underlying asset) but no obligation. The call & put option helps to trade in both the directions (upward as well as downward). Selection of right trade instrument is a vital part of trade plan.
