I understood what is future market, what is option market . call option, put option, what is caution deposit and premium. call buying call selling. If price moves above strike price who get benefited. how to buy correct strike price.
- : cash market is we buy a stock pay a current market price. In spot market is a contract signed by seller and buyer in future is called spot market.
- : Exchange role cash settlement is daily basis MTM in this settlement done by exchange only in derivative market.
- : margin is nothing but caution deposit of the buyer and seller. MTM is mark to market price price differences in cmp and bought price. premium is IN OPTION market buyer pay the insurance amount to a seller is called premium. strike price means index price. As per contract end date is called expiry date. lot size means in future market stock will available in bulk quantity .
- : Option market contract will execute as per buyer wish only. otherwise contract will expired . Future market compulsory execute the contract.
- : As per our expectation trend is bullish we buy a call option . CMP is above strike price buyer will get benefited. Put option is in bearish trend buyer buy a put option. after he bought CMP is below strike price buyer get benefited. Buyer and seller decide the premium.
- : Buyer and seller mutually agreed today the product will be settled in future date and particular price and sign the agreement front of SEBI. this type of contract is called Future contract.
- : As a Trader use less amount, that is margin and premium utilized to execute the trade. he manage the fund.
- : We cannot trade direct nifty. but we trade in nifty index. in future market and also option market trade NIFTY index.
- : In physical settlement means as per contract product should be delivered in expired date. Cash settlement means adjust the price difference will give money.