NISM Series XV : Research Analyst Certification Exam Notes
Page 20 Of 62
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Spot trades are the trades where settlement (payment and delivery) occurs on the spot date, which is normally two business days after the trade date.
Forward contracts are contractual agreement between two parties to buy or sell an underlying asset at a certain future date for a particular price that is decided on the date of contract
Futures are standardized exchange traded forward contracts. They are standardized as to the market lots (traded quantities), quality and terms of delivery - delivery date, cash settlement or physical delivery etc.
An Option is a contract that gives the right, but not an obligation, to buy or sell the underlying asset on or before a stated date and at a stated price
Call gives the buyer the right, but not the obligation, to buy a given quantity of the underlying asset, at a given price on or before a given future date.
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