In today’s module we have learnt about the derivative instruments and its usage, spot market, cash market and Exchange’s roles in such derivative trades. The derivatives in India are Futures and Options. In option there are two types call option and put option.
MOHAN KUMAR R, , Futures and Options, Call option, Cash Market, derivatives, Futures, Margin, MARKET PRICE., MTM, Obligation to buy, options, premium, Put Option, right to buy, settlement types, spot market, strike price
Hi,
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 right to sell with no obligation while Put option seller has an obligation to buy.
Only the buyer pays premium not the seller.
Yes Naresh you are correct. Your point is very crisp, I think i made it very complicated. I hope i will get it corrected in my future post. Thanks a lot 🙂