The spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument,In derivative market exchange create the weekly, monthly contracts in derivative counter and collect the caution deposit and premium amounts from the traders, also to confirm the contract ending smoothly at the end of the each trading day exchange will adjust the premium and caution deposit at mark to the market.to avoid the huge loss in cash market trader need the futures&options for hedging purpose.

  • : The spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument
  • : In derivative market exchange create the weekly, monthly contracts in derivative counter and collect the caution deposit and premium amounts from the traders, also to confirm the contract ending smoothly at the end of the each trading day exchange will adjust the premium and caution deposit at mark to the market
  • : Margin : A margin is collateral that the holder of a financial instrument has to deposit to cover some or all of the the credit risk of their counter party ( broker/exchange) MTM : It is the abbreviation of Marked to Market. The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day. Premium : It is money paid by the option buyer to buy either call/put option. The seller of the option contract collects the premium to sell the rights to the buyer of the call/put option. Strike Price : The strike price is defined as the price at which the holder of an option contract can buy (call option) or sell (Put option) of the underlying asset when the option is exercised. Expiry Date : It is the last day that an options or future contract is valid. Lot Size : It refers to the number of underlying shares in one contract. In other words, it is the quantity in which an investor in the market can trade in the Derivative of particular stocks.
  • : in future contract both buyer and seller have obligation to execute the right in other hand option buyer do not have any obligation to buy,This is the main difference between futures and options.
  • : the right to buy a stock is called call option and a the right to sell a stock is called put option, A Call option is used when we expect the prices to increase/rise. A Put option is used when we expect the prices to decrease/fall, since option seller will decide the premium
  • : A futures contract is an agreement to buy or sell an asset at some point in the future. .
  • : to avoid the huge loss in cash market trader need the futures&options for hedging purpose
  • : Traders can trade nifty index in derivative market To trade directly in the Nifty index two kinds of derivatives are available- futures and options. One of the leading advantages of trading in index is that traders with a small capital enjoy high leverage. It has good volatility, trends and signals.
  • : In an F&O contract, when there is an open position that has not been squared off by its expiry date, physical settlement takes place. This implies they have to physically give/take delivery of stocks to settle the open transactions instead of settling them with cash. A cash settlement is a settlement method used in certain futures and options contracts where, upon expiration or exercise, the seller of the financial instrument does not deliver the actual (physical) underlying asset but instead transfers the associated cash position.
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