Futures And Options Trading Interview Questions & Answers

Below we have listed all the Futures And Options Trading Interview Questions and answers. Feel free to comment on any Futures And Options Trading Interview Questions or answer by the comment feature available on the page.

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Derivatives are instruments that derive their value from an underlying security like a share, debt instrument, currency or commodity. Futures and options are the two type of derivatives commonly traded. A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Such an agreement works for those who do not have the money to buy the contract now but can bring it in at a certain date. These contracts are mostly used for arbitrage by traders. It means traders buy a stock at a low price in the cash market and sell it at a higher price in the futures market or vice versa. The idea is to play on the price difference between two markets for the same stock. In case of futures contracts, the obligation is on both the buyer and the seller to execute the contract at a certain date. Futures contracts are special types of forward contracts. They are standardized exchange-traded contracts like futures of the Nifty index.