To find out which market in India has a better pull, first and foremost, we need to understand what we mean by Futures or Options.
Futures: Futures is when two parties sign an agreement or contract to buy or sell an asset at a certain time at a certain price in the future. This is good for those planning for the future as you can acquire a Futures position by just putting up some margin amount instead of full cash. It means buying for cash, a stock at a lower price and selling it in the future market for a higher price. Future contracts is all about playing between two markets for the similar stock on the price difference. What is this? In the case of future contracts, it is a commitment on the buyer and seller to liquidate the contract at a certain future date. They are standard exchange traded contracts.
Options: There are two types of options ‘calls’ and ‘puts’.
Calls: The buyer has the right to purchase or sell (what??) a given amount of the said primary asset at a said price on or before a said future date.
Puts: The buyer has the right but not obliged to sell a said amount of the primary asset at a said price on or before a said date.
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Future Contracts |
Options Contracts |
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