By- Chirag vora

Srn No- 201800096

CIE – 2
Course teacher- Prof.Pashmina Shah
 Options are financial instrument that
are derivatives based on the value of underlying
securities such as stocks. An options contract
offers the buyer the opportunity to buy or sell—
depending on the type of contract they hold—
the underlying asset. Unlike futures, the holder
is not required to buy or sell the asset if they
choose not to.
 Call options allow the holder to buy the asset at
a stated price within a specific timeframe.
 Put options allow the holder to sell the asset at a
stated price within a specific timeframe.
 Options are financial derivatives that give buyers
the right, but not the obligation, to buy or sell an
underlying asset at an agreed-upon price and
date.
 Call options and put options form the basis for a
wide range of option strategies designed for
hedging, income, or speculation.
 Although there are many opportunities to profit
with options, investors should carefully weigh
the risks
 Futures are derivative financial contracts that
obligate the parties to transact an asset at a
predetermined future date and price. Here, the
buyer must purchase or the seller must sell the
underlying asset at the set price, regardless of
the current market price at the expiration date.
 Underlying assets include physical commodities
or other financial instruments. Futures contracts
detail the quantity of the underlying asset and
are standardized to facilitate trading on
a futures exchange.. Futures can be used for
hedging or trade speculation.
 Futures are financial contracts obligating the
buyer to purchase an asset or the seller to sell an
asset and have a predetermined future date and
price.
 A futures contract allows an investor to
speculate on the direction of a security,
commodity, or a financial instrument.
 Futures are used to hedge the price movement
of the underlying asset to help prevent losses
from unfavorable price changes.
 Options and futures may sound similar, but
they are very different. Futures markets are
easier to understand but carry considerable
risk due to the size of many of the contracts.
 Buying options can be quite complex, but the
risk is capped to the premium paid. Options
writers assume more risk. In fact, options
writing is best left to experienced options
traders.
 Options and futures are similar trading products
that provide investors with the chance to make
money and hedge current investments.
 An option gives the buyer the right, but not the
obligation, to buy (or sell) an asset at a specific
price at any time during the life of the contract.
 A futures contract gives the buyer the obligation
to purchase a specific asset, and the seller to sell
and deliver that asset at a specific future date
unless the holder's position is closed prior to
expiration