It is derivatives… D3..

The derivative segment is one of the most popular segment in the world. The main purpose of the derivatives are hedging or loss protection. The derivative is called so, because it derives its value from an underlying stock or commodity.
Futures and Options [F&O] ]are main components of the derivative segment. The F&O market is mainly used to cover ones loss by eliminating the uncertainty of stock price movement. Both futures and options are much standardized by an exchanges.
In Futures, the contract value would be zero during initiation and over the period of time, depends on the underlying price, the value is increased or decreased. Here, both buyer and seller are having right and obligation to execute the contract on the specified date.
In options, the option holder is having right to buy or sell the underlying at the given price known as Strike price. The option holder is called Long. Uptrend is called Call and downtrend is called Put. The Call option holder is having an positive view about the market and is expecting the market to go up. The put option holder is having negative view and is expecting to the market to perform poor in near term. Though speculation is involved, the main purpose of this derivative segment is provide the peace of mind irrespective of the stock movement.