Stock Market Basics FAQs

Differentiate between Futures and Options.

OPTIONFUTURE CONTRACTS
Options are a type derivative that derives value from an underlying instrumentFuture Contracts are a type of derivative that derives value from an underlying instrument.
The contract does not give the investor any obligation to sell or buy before it expires. Only the buyer or seller is obligated to buy or sell.Future contracts must be agreed upon by the sellers and buyers.
Sell and buy at the strike priceYou can buy and sell at a future price that is acceptable.
Retail investors can trade in a specified quantity.It is a great resource for institutional investors who want to trade large quantities.
Options are safer than futures.Options are riskier than futures, but they're comparatively safer than Futures
Buyers can receive unlimited profits but a limited loss contract.Buyers can make unlimited profit and loss


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