Futures give the investor the opportunity to benefit from price fluctuations of stocks and index
Options give you the right but not the obligation to buy or sell the underlying asset. It offers you the potential to profit from share price movements (both rises and falls) without necessarily holding the underlying shares. They can be divided into a call (when you buy the underlying) or put (when you sell the underlying) options.
Buying an option can be regarded as equivalent to taking out insurance - you pay out a premium in advance and if a specified event occurs then that's the time you get paid.
Trading in options is for*:
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*Derivatives carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Arihant. Please read the Derivatives Risk Disclosure Document titled Risk Disclosure Document - NSE (Derivatives Segment) before considering any option transaction. Call your local Arihant office or write to Arihant Capital Markets Ltd, 6, Lad Colony, Indore-452001, Madhya Pradesh, India, for a current copy.