1 Comment
  1. Naresh 4 years ago

    Hi,
    This would be appropriate answer for the below questions

    Is it possible to trade NIFTY? Explain how?
    we can’t buy an individual stock, however, it can be bought in other segments of trading know as FUTURE & OPTIONS. Future and options are known as derivatives.

    What is call option and put option? Who decide the premium?
    In an options contract, the Call option buyer has the right to buy with no obligation while Call option seller has an obligation to sell. A put option buyer has the right to sell with no obligation while Put option seller has an obligation to buy. The buyer and seller decide premium.
    If the market to go up the buyer of call option or seller of a put option will make money, On the flip side, if the market to go down the buyer of put option or seller of a call option will make money.

    What is the role of exchange in derivative instruments?
    SEBI was set up with the main idea to regulate activities in the stock exchange and ensure safe investments.

    How option contract differ from future contract?
    An option gives the buyer the right, but not the obligation, an asset at a specific price at any time during the life of the contract meanwhile, futures contract is the obligation to sell or buy an asset at a later date at an agreed price.

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