Spot Market is the place where settlement takes place on the same day. In futures buyer and the seller both has the rights to buy and sell. In options only the buyer has the right to buy and sell.In futures buyer and seller both have obligations but in option buyer does not have any obligation.In futures refundable caution deposit will be collected from both buyer and seller but in options premium is collected from buyer only. In a option contract where the Buyer gets the Rights to Buy without any obligations is called CALL Option. In a option contract where the Buyer gets the Rights to SELL without any obligations is called PUT Option.
Premium is calculated based on the current market price and time.Strike price – Market price. Ledger balance will be neutralised on day to day basis i.e.MTM Mark to Market

  • : Stocks are traded in spot and the delivery of the shares will take place on the same day.
  • : Derivative instruments are futures and options. In futures exchange will collect the refundable caution deposit from both buyer and seller of the contract. In options premium is collected from the buyer of the option. In both, ledger balance will be neutralised on day to day basis i.e.MTM Mark to Market
  • : Margin is the amount collected from bothe buyer and seller of the future contract. MTM is nothing but Mark to Market. ie. neutralising the ledger balance on day to day basis. Premium is the money collected from the buyer of the option contract. Strike price is the predetermined price at which the buyer and seller of the option agree on a contract. An expiry date is the last day that an options or future contract is valid. Lot size refers to the number of contracts.
  • : 1) In futures buyer and the seller both has the rights to buy and sell. In options only the buyer has the right to buy and sell. 2) In futures buyer and seller both have obligations but in option buyer does not have any obligation. 3) In futures refundable caution deposit will be collected from both buyer and seller but in options premium is collected from buyer only.
  • : In a option contract where the Buyer gets the Rights to Buy without any obligations is called CALL Option. In a option contract where the Buyer gets the Rights to SELL without any obligations is called PUT Option. Premium is calculated based on the current market price and time. Strike price - Market
  • : It is a contract between two parties where both parties agree to buy and sell of a specific quantity at a predetermined price at a specified date in future with obligations.
  • : The trader need the futures/call/put because they need not invest the entire stock amount. They need only the caution deposit or premium. They also make a deal today for a future settlement.
  • : Yes
  • : At the end of the contract the holder of the position is simply debited or credited the difference between the agreed price and the final settlement is called cash settlement. Physical settlement require the holder to either produce the commodity or take delivery from the exchange.
1 Comment
  1. EQSIS 5 years ago

    good work

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