Nse future and options tips


Derivatives are financial instruments that derive their value from an 'underlying'. The underlying in NSE stock market is a stock issued by a company. Futures Contracts means you agree to buy or sell the underlying security at a 'future' date. If you buy the contract, you promise to pay the price at a specified time. If you sell it, you must transfer it to the buyer at a specified price in the future. He is, however, not obligated to do so. The seller of an option is obligated to settle it when the buyer exercises his right.

In futures contracts, the buyer and the seller have an unlimited loss or profit potential. The buyer of an option can make unlimited profit and faces limited downside risk.

The seller, on the other hand, can make limited profit but faces unlimited downside. Required to pay only margin money. What are futures and options? There are of two types contracts: What is a futures contract?

Derivatives are financial instruments that derive their value from an 'underlying'. The underlying in NSE stock market is a stock issued by a company. Futures Contracts means you agree to buy or sell the underlying security at a 'future' date. If you buy the contract, you promise to pay the price at a specified time. If you sell it, you must transfer it to the buyer at a specified price in the future. He is, however, not obligated to do so.

The seller of an option is obligated to settle it when the buyer exercises his right. In futures contracts, the buyer and the seller have an unlimited loss or profit potential. The buyer of an option can make unlimited profit and faces limited downside risk. The seller, on the other hand, can make limited profit but faces unlimited downside.

Required to pay only margin money. What are futures and options? There are of two types contracts: What is a futures contract?