Derivatives Market

The derivatives market consists of futures and options.
In futures, the buyer and seller have a liability to honour the deal on the pre decided date.
In options, the buyer of the option has a right, but no obligation to buy/sell.
The seller of an option is paid a premium by the buyer.
The buyer of an option can either buy(call) or sell(put) an option.
The amount agreed on by the buyer and seller is called the strike price. Once the strike price is reached, the buyer has the option of buying/ selling or letting go of the option.