How to Trading in Futures and Options

What is Futures and Options in Share Market Futures and options are both types of derivatives, meaning their value is derived from an underlying asset, such as stocks, commodities, currencies, or indices. They are commonly traded in the financial markets, including the stock market, and are used for various purposes, including speculation, hedging, and risk management.

Here’s a brief overview of futures and options:

Futures Contracts:

A futures contract is an agreement between two parties to buy or sell an asset at a specified price on a future date.

How to Trading in Futures and Options

The buyer of a futures contract is obligated to buy the underlying asset, while the seller is obligated to sell it, at the agreed-upon price (the futures price) at the specified future date (the expiration date).

Futures contracts are standardized and traded on organized exchanges, such as the Chicago Mercantile Exchange (CME) or the Intercontinental Exchange (ICE).

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Futures contracts are often used for hedging against price fluctuations or for speculation on the future direction of prices.

Options Contracts:

An options contract gives the holder the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price (the strike price) on or before a specified date (the expiration date).


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