What are Futures and Options trading in stock market and how do they work? All explained

Investment in equities is considered to be a riskier affair. A trade is executed only when two people, a buyer, and seller, enter into a derivative contract where they agree to sell or buy or vice-versa the underlying asset at a certain price target within a time range. Ina F&O trade, at the time price target is achieved, a person makes good profits, whereas, not reaching the strike price or target price can vanish all capital. Options Trading In an option trade, unlike the futures, options give the right but do not oblige you to sell or buy the contract at a certain price. "Options contracts are also purchased or sold in form lots, but they can be bought at a very nominal premium price compared to the futures," Arun said.