TRADING INSTRUMENTS
(SPOT AND DERIVATIVE)
SPOT- deal and cash settlement happens at the SAME DAY
*profit/loss can be realized only after selling shares.
OPTION CONTRACT-get rights but no obligation.
FUTURE CONTRACT-no rights but have obligation.
FUTURES
right to buy /right to sell
can make deal
but not settlement
settlement at the maturity period.
CALL OPTION- Right to buy.
PUT OPTION-Right to sell.
HAVE RIGHT TO BUY OR SELL BUT NO OBLIGATION.