From this module we learn basics of futures and options and the role of derivate instruments and basic terms like MTM , Margin, expiry date, premium and the basics of call options and put options and what all the features of the call option and put option where the study is about the spot market and cash market Equity is spot Market
futures and options are cash or derivative market and difference between the future contract and option contract and physical settlement and cash settlement

  • : Equity is spot Market futures and options are cash or derivative market
  • : The stock exchange maintains the margin and premium of the both buyer and seller and involves in the process of settlement
  • : Margin- is the caution deposit paid to the stock exchange MTM(mark to the market) day today price fluctuations is realized in money premium-is money given to the seller to sign the contract expiry date- future date or maturity date of the contract Lot size - the number of quantity of the share
  • : Options-Deal is happened in the same day and position delivered on the same day , Buyer gets rights and have no obligations Future-Deal is happening now and executed later or end of the year seller has rights and have no obligations
  • : Trade both between buyer and seller call options - when the buyer gets rights to buy and have no obligations put options- when the buyer gets rights to sell and has obligations The premium is decided by the seller
  • : If the Buyer is agreed to buy the stock and get position in the future i,e end of the year where as the trade is happening now and the settlement is happening later for hence forth buyer and seller have rights to buy and sell
  • : In futures traders gets to customize the trade and profit is given on day today basis investment is not 100% margin the only thing we have to pay
  • : yes it is possible we can trade in NIfty where the average percentage is calculated on the basis of the average of NIFTY 50 companies that is the top 50 companies in the NIfty
  • : Physical settlement - Last date when the asset is settled even the price goes up he can still trade in the current market price cash settlement-last date the compensation is settled
  • : Is it possible to trade Nifty and How ???
1 Comment
  1. Naresh 7 months ago

    Hi,
    This would be an appropriate answer for the below question
    Is it possible to trade NIFTY? Explain how?
    we can’t buy an individual stock, however, it can be bought in other segments of trading known as FUTURE & OPTIONS. Future and options are known as derivatives.

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