F&O Basics

The future and options is a trading instrument which is provided by the exchange for trader. These instruments can be used to make profit by analyzing the future trend of the market. The future contract is simple that the buyer and seller makes an agreement at a specific strike price. They both have to fulfill their agreement within the expiry date. But in options trading, the buyer need not have to comply with any deal. To compensate this, the seller is given some money in the form of premium to sign the contract. But if the market becomes in favor of the buyer, the seller has to pay the buyer. But in options the strikeprice and premium plays an important role in determining the profit or loss of the buyer/seller.