What Is Option Contract In Derivative Market In India?

Discussion in 'Stock Market Forum' started by deepika sharma, Dec 18, 2018.

  1. deepika sharma

    deepika sharma Member

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    The derivative market in India is becoming quite popular since the time they were rolled out in the year 2000. For those who do not know, derivatives are basically those financial instruments that derive their values from their respective assets. The assets can be commodities, stocks, bonds, currencies, interest rates, equities. You can make profits by speculating on the future value of these assets. If you are planning to trade in the derivative market, then it is important that you must have a good knowledge about its types to ensure you meet your financial objectives hassle-free.

    Option contract is essentially a form of contract that gives rights to the buyer to either buy or sell the underlying asset at a particular price during a specific period of time. The price at which an asset will be sold is also known as the 'Strike Price'. It is also imperative to note that the option contract is basically of two types, which are:

    · Call Option: Here, the buyer has the right to purchase an underlying asset at a fixed price or before the expiry.

    · Put Option: Here, the buyer has the right but not obligated to sell an asset at a fixed price or before the expiry.

    Nowadays, it has become quite an easy task to trade in the derivative market in India. You can trade by using the laptop or mobile. If you are using the mobile for the purpose of trading, then nowadays, there are many Advisorymandi.com stock market apps available in the market that can be used for the purpose of derivative trading hassle-free.
     

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