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Futures- the deal happens now but the settlement happens latter
- if the trader doesn’t have money to buy a contract now but can bring it at latter date
Options
- Call options are needed by the buyer to get the rights to buy the share without obligation
- Put options are needed by the buyer to get the rights to sell the share without obligation
Trader needs futures, call and put to minimise the risk and can earn money with the changing price. He wants to do the business peacefully without the headache of price fluctuations.
These trading instruments like future, call or put enables the trades to make a profit on future price movements with a little investment
It helps the investor to increase his exposure without having to really take delivery of stock, hence not necessitating a full investment for the no. of share (futures) purchased (buy/sell)
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