financial derivatives

This query is : Resolved

Share Report Follow Query Ask a Query

Amit Kumar Soni

Amit Kumar Soni (Querist)
Follow

11 January 2011 What is difference between Option and Future?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
Follow

11 January 2011 Options Contract is a type of Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer / holder of the option purchases the right from the seller/writer for a consideration which is called the premium. The seller/writer of an option is obligated to settle the option as per the terms of the contract when the buyer/holder exercises his right. The underlying asset could include securities, an index of prices of securities etc.

Futures Contract means a legally binding agreement to buy or sell the underlying security on a future date. Future contracts are the organized/standardized contracts in terms of quantity, quality (in case of commodities), delivery time and place for settlement on any date in future.

source https://www.caclubindia.com/articles/what-is-derivative--1988.asp

Amit Kumar Soni

Amit Kumar Soni (Querist)
Follow

12 January 2011 Thank u sir

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now