In this section we learnt about the F&O , Call & Put options buying and selling.
- : Buying the stock with ready cash.
- : The exchange keeps the contract and make sure that both buyer & seller of the contract are binding to it.
- : Premium - Price paid to buy an option Strike Price - Set price at which options can be bought or sold. Expiry Date - Particular date on which the F&O contract expires (normally lost Thursday of every month for stock F&O) Lot Size - No. of shares in one contract. Margin - Minimum amount required to buy/sell the contract. Varies depends upon the broker. MTM - Future contracts are settled on each trading day.
- : In option contract the buy don't have any obligation to buy the stock. But, in future you have buy the stock on agreed date.
- : Call option buyer gets the right to buy and not obligation. Put option buyer gets the right to sell & not obligation. Premium is decided by the option seller.
- : Future contracts are a deal made today to buy something on some agreed date.
- : If a trader in sure about the market then he can go for futures. If he is not sure where the market will go then he can go for options. If the trader thinks that market will go up he can buy call option. If he thinks the market will go down then he can buy put option.
- : Yes, nifty can be traded in F&O segment and not as spot deal.
- : Physical settlement is done by delivering the stock or any other commodity as agreed. Cash settlement is done by paying the current price of the stock or settlement as agreed.