Futures and Options – Derivates or F&O Segment Market

In Stock market, there are two way one can trade the assets listed in the market, we call it as Spot and Derivates markets (F&O). Under spot market one has to settle their commitment in physical whereas in derivative market, exchange demands Cash settlement.
Traders use F&O market for hedging purpose, to buy large amount of shares with minimum caution deposit instead of paying full amount, selling futures for overnight position which is not possible in spot market. In future market it is equal chances of making money and losing.
One can also trade in Options with limited capital or limiting their risk to the extent of the premium paid.
There is difference between future and option contract, in future contract both buyer and seller has RIGHT and also Obligation to meet their commitment on or before expiry whereas in OPTION trade BUYER of Call or Put has RIGHT but no Obligation to execute his commitment to the counter party, but one has to remember that buyer of option has to pay premium money to seller and subjected to strike price chosen and risking his full premium money again which is subject to erosion.
One can also trade in Indices of Indian market such as Nifty/Bank Nifty via buying/selling of future of Nifty/BN or buying/Selling of Options.