Understand online futures trading

Understand Online Futures Trading Futures and Options are two most commonly heard and important derivative in the stock market operational fields. Derivative signifies the value of an underlying asset. Stock markets are such trading markets or platforms where securities and stocks as well as shares are exchanged among various investors who invest as per their capabilities to gain handsomely within shortest possible time. This is like trying to get extra income besides regular income. This stock market operation is flourishing in the country. Future contract or trading suggests a kind of trading strategy where exchange of goods for money takes place in future at a price that too gets decided then.

Commodities and Equities can be traded in this manner. Both Future and Option Trading are followed extensively in the Indian Stock Market trading.

Option is basically an instrument which is traded at the derivative field of the stock market. It simply denotes the contract in which the buyer and seller decides to buy and sell the underlying asset or assets at a fixed determined price value on or within the expiry of the contract. While buying an option the buyer has the right to exercise the option within the decided time period but, however, the right is not mandatory like, the buyer is not bound to exercise the right within that time. On the other hand if the buyer wishes to exercise such right then the seller is left with no other choice but to honor that wish of the buyer.

Under option trading strategy only the buyers are facilitated all the time and the sellers enjoy very less flexibility or freedom of choices in this. They always surrender to the decisions of the buyers and can do nothing much about this. In option trading segment the price that is decided upon to do trade at is called the Strike Price. Under options trading system there are two types of options called “Call Option” and “Put Option”. Under Call option the trader or rather the buyer has the right to buy the underlying asset at the strike price and it empowers the buyer to demand selling of it at which the seller has got nothing to do but yield in. For buying Call option one is required to pay the premium price of the contract to the Option writer i.e. who is creating the option contract.

As per the Put option the buyer has the right to sell and the seller has the right to buy the underlying asset and here also the seller is helpless as he has no choice but to surrender to the wishes of the buyer even if the seller does not want to buy. The buyers are under any circumstances; enjoy a favorable position in the stock market scenario. Sellers have limited scope in this type of trading strategy. However, in option trading one needs very less deposit to trade.

Future trading is a kind of trading that result in good price value that the seller can earn as the trading actually takes place in future when the price gets naturally hiked.