Basics of Future & options gives various ideas to trade in market.

  • : Cash market is the place where the stocks are traded at full value of stocks.
  • : Exchange plays a vital role in making settlement or guiding all trades happening in Future & options trade. Exchange holds the security amount as permium which is used incase of any deviation in contracts.
  • : Margin is the minimum amount decided by exchange for any future contracts. MTM is Mark to MArket which is calculated on daily basis on Future contract and daily profits are settled to the buyer/ seller as per market price. Premium is the minimum amount caluclated and taken as advance for any option contracts. Strike Price is the expected price of stocks on specific date for any option contract. Expiry date is the date of expiry of option contract as decided by the buyer/ seller. Lot size is the minimum no of shares to be purchsed on option contract.
  • : Option contract is executed with prmium amount and Future contract is excuted with margin amount which is decided by exchange.
  • : Call Option is the contract executed when the buyer is speculating the price to go up. Put Option is the contract executed when the buyer is speculating the price to go down. Perimum is the minor amount decided by the exchange for the option contract instead of full value of stocks.
  • : Future contract is the contract in which buyer or seller will be ready to take the physical stocks on a mutually agreed date and on agreed price.
  • : Trader needs derivative contracts like Future & options inorder to trade on premium value instead of full value of stocks.
  • : It is possible to trade on Nifty under Options & Future contracts.
  • : Cash settlement is executed on Spot market where the stocks are traded at its full value. Physical settlement happens in future contract on a specific date and specific price.
1 Comment
  1. Naresh 7 months ago

    Hi,
    Good work… Hope this helped you to recollect the workshop content.

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