Futures and Options — An IntroductionFutures aur Options — Introduction
See the key difference between futures (obligation) and options (right) before going deeper.Aage badhne se pehle futures (obligation) aur options (right) ka main farq samjho.
📖 LessonLesson
Futures and options (F&O) are the two main types of exchange-traded derivatives.
| Futures | Options | |
|---|---|---|
| Buyer has… | An obligation | A right, not an obligation |
| Seller has… | An obligation | An obligation if the buyer exercises |
| Upfront payment | Margin by both sides | Buyer pays premium; seller deposits margin |
| Profit/loss | Moves point-for-point with the index | Buyer's loss limited to premium; seller's loss can be large |
Both have a lot size and an expiry date. NIFTY options expire on Tuesdays (weekly and monthly). On expiry, index contracts are settled in cash.
Futures aur options (F&O) exchange par trade hone wale do main derivatives hain.
| Futures | Options | |
|---|---|---|
| Buyer ke paas… | Obligation | Right, obligation nahi |
| Seller ke paas… | Obligation | Buyer exercise kare to obligation |
| Upfront payment | Dono side margin | Buyer premium deta hai; seller margin rakhta hai |
| Profit/loss | Index ke saath point-to-point | Buyer ka loss premium tak limited; seller ka loss bada ho sakta hai |
Dono ka lot size aur expiry date hota hai. NIFTY options Tuesday ko expire hote hain (weekly aur monthly). Expiry par index contracts cash me settle hote hain.
⚠️ Common mistakesCommon galtiyan
- Thinking option buyers can lose more than the premium paid.Ye sochna ki option buyer premium se zyada haar sakta hai.
- Thinking futures buyers have a “right” to walk away.Ye sochna ki futures buyer ko chhod dene ka “right” hai.
- Forgetting that the seller of an option takes on the obligation.Bhoolna ki option seller obligation leta hai.
✅ Quick quizQuick quiz
Score 2 out of 3 or more and the lesson is marked complete automatically.3 me se 2 ya zyada score karo, lesson apne aap complete mark ho jayega.
📝 SummarySummary
- Futures = obligation for both sides.Futures = dono side obligation.
- Options = right for the buyer, obligation for the seller.Options = buyer ka right, seller ka obligation.
- Both have lot sizes and expiries; index contracts are cash-settled.Dono me lot size aur expiry; index contracts cash-settled.
📚 Sources & market rules usedSources aur market rules
- NIFTY expiry day: Tuesday — weekly and monthly NIFTY expiries (monthly = last Tuesday of the month) since September 2025. NSE circulars (expiry day revised from 1 September 2025)
- NSE
Last reviewed: 2 November 2026 · Version 1.0 · Prepared by the SmaartAlgos Academy team.Last reviewed: 2 November 2026 · Version 1.0 · SmaartAlgos Academy team dwara taiyaar.
Education only. SmaartAlgos is not a SEBI-registered investment adviser or research analyst. Nothing in this lesson is a recommendation to buy or sell any security. Options trading involves substantial risk of loss. Examples are hypothetical or simulated; market rules are shown with their effective dates — always confirm the latest official circulars.
Sirf education. SmaartAlgos SEBI-registered investment adviser ya research analyst nahi hai. Is lesson me kuch bhi kisi security ko buy ya sell karne ki salah nahi hai. Options trading me bada loss ho sakta hai. Examples hypothetical ya simulated hain; market rules effective date ke saath diye gaye hain — hamesha latest official circular confirm karo.