What Are Futures And Options?

Looking Forward

Futures allow hedging against future market volatility by locking the price in an obligatory contract.


Options are also contracts between buyers and sellers. But it's non-obligatory.

Options Are Derivatives

Because they derive their values from the underlying asset - the contract's value fluctuates along with the underlier's price movement.

Options Types

There are two types - put and call. Call options give buyers the right to buy. And put options give you the authority to sell.


Premium is the amount you pay upfront as a buyer of the contract to the 'writer'. If the buyer exit the agreement, the writer gets to keep the premium paid.

Futures Offers True Hedge 

It's a zero-sum game. Each party gets squared off at the end of the day based on the day's asset price movement. 

Options Spread 

Spread is a typical options trading strategy. You buy and sell equal numbers of options on the same asset at different strike prices to cover any risk.

F&O Segment

It refers to the market where traders trade in F&O. It is different from the cash market where stocks trading happens.

F&O Players

Wealthy investors, asset management companies, banks are some everyday players, along with retail investors.

Portfolio Diversification 

F&O allows investors to diversify and expand their investment capacity with margin benefits

Invest In F&O