All about futures and options trading examples


What are the different contract months available for trading? A call optionoften simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of option. The price of the call contract must reflect the "likelihood" or chance of the call finishing in-the-money.

How are Stock Futures different from Stock Options? Views Read Edit View history. Adjustment to Call Option: For call options in general, see Option law.

Can I square up my position? Adjustment to Call Option: Energy derivative Freight derivative Inflation derivative Property derivative Weather derivative.

Risk-return profile is symmetric in case of single stock futures whereas in case of stock options payoff is asymmetric. The term "call" comes from the fact that the owner has the right to "call the stock away" from the seller. How does an investor, who has the underlying stock, use Stock Futures when he anticipates a short-term fall in stock price?

Moreover, the dependence of the option value to price, volatility and time is not linear — which makes the analysis even more complex. Do I have to pay mark-to-market margin? Why are the market lots different for different stocks?