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Futures and Options
| What is it? | A futures contract means the buyer and seller agree to trade the asset at a set price on a future date. An options contract gives the buyer the choice (not the obligation) to buy or sell the asset at a set price within a certain time. |
| Why use it? | You can hedge against price fluctuations or speculate on the future price movements of the underlying asset. |
| Example | You buy a futures contract for 100 shares at ₹50 per share, with an expiry date of one month. If their price rises to ₹60 by the expiry date, you can sell the futures contract at a profit. |
Important: Futures and options trading requires a good understanding of the market and risks. Have a well-thought-out trading strategy beforehand.
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