Future and option are the derivative which give an option for the trade to make money and hedge their investment. In option trading it gives the option to trade but no obligation.
- : Shares that are traded and delivered on the same day
- : In future market exchange manages refundable margin from both buyer and seller and in option it manages the premium to execute
- : Margin - refundable amount paid to broker MTM - Mark to market Expiry date - validity of the contract Lot size - Number of share in contract Strike price - Defined price for which derivative can be bought or sold for execution Premium - Price defined to buy a contract
- : In future its a contract between buyer and seller at certain price and period. In option its a contract for the buyer the right to buy at certain price and period but no obligation.
- : Call option buyer gets the right to buy and in put option buyer gets the rights to sell. Premium price is depends on the price of the share and the time available for execution.
- : Its contract between future buyer and future seller for executing the contract for future period at predetermined price.
- : Its comfort for the trader if he wants to buy the asset in future predicting it may go up or down. Rather in spot market traders need to pay in full.
- : To trade in NIFT we have Future nifty and option nifty. In future nifty buyer and seller can trade at certain period of that particular contract and in option nifty trader can trade using call or put option for that particular period of time of that contract
- : Its a settlement where seller are transferring the net cash of the asset at the time of delivery in cash whereas seller transferring the asset at the time of delivery in physical settlement