Future and option

Trading on equities is spot market. Trading in Futures and options are called as derivative market.

In derivates the trade is executed only at the end of the contract period.

In future the margin is transferred to both buyers and sellers on a daily basis.

In option, the buyer needs to pay a premium for the seller to sign the contract.

In Options, the buyer has the right to buy or sell at the end of the contract period but is not forced to buy.