Trading in Future Options

Future options are an excellent way to trade the future markets. Instead of straight futures contracts there are many new traders who start by trading futures options in the stock market. There is very less risk and volatility when you use options instead of futures. But you will mainly see traders who are professional who use trade options.
When we say “option”, it means the right but not the obligation in order to buy or sell a futures contract at a designated price. You need to buy options in the Indian stock market in order to bet on the price of the futures contract so that it goes higher or lower in trading purposes. So there are mainly two types of options – call option and put option.

i. Call Option:
If you think that the underlying futures price will move higher then can buy call option. Also there is a concept known as, “corn call option” when you can expect corn futures to move higher.

ii. Put Option:
In terms of put option, if you believe that the underlying future prices will move lower, then you can always opt for this option. Then there is a “soybean futures” where you can expect to move lower. This is called “soybean put option.”