Frequently Asked Questions
How much money do I need to start?
What is an Option?
- An option is a contract to buy/sell a stock (underlyer).
- Contract defines a fixed price at which stocks could be traded. This is called strike price.
- Contract has a maturity date which is the date till the contract is valid.
- The seller (called option writer) sells the contract to Buyer.
- Buyer pays the price of the contract called premium to seller.
- Buyer has the right, but not the obligation to buy/sell the stock(underlyer) at a fixed price (strike price).
- The contract also obligates the seller or writer to meet the terms of delivery if the contract right is exercised by the contract buyer.
If you have not fully understood the concept of Options please don’t give up. Continue to read the FAQ section; many of your doubles will get cleared after reading subsequent sections.
Can I trade options on any listed stocks/Index?
What is the difference between Futures and Options?
Options contract gives the buyer the right, but not the obligation to buy (or sell) the underlying asset (stock, Index etc) at a specified price at any time during the life of the contract
On the other hand futures contract gives the buyer the obligation to buy underlying asset (index, stock etc) at a specified price at any time during the life of the contract