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Basics about Option and future trading

Option and future trading Options and futures trading are two popular forms of derivatives trading that allow traders to speculate on the future price movements of underlying assets. While both options and futures offer the potential for profit, they have distinct differences and unique characteristics that traders should understand before entering the market. Options Trading: Options are contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (strike price) within a specified time period. Options trading provides traders with the ability to potentially profit from both upward and downward price movements of the underlying asset, while also limiting potential losses through the use of strike prices. There are two types of options: call options and put options. A call option gives the buyer the right to buy the underlying asset at the strike price, while a put option gives the buyer the right to sell the underlying ass...