In the cash market, we place a buy order and take the delivery of the stocks.

Whereas in the derivatives market, we decide the price and quantity now but the actual payment and delivery is done at the future date which is on the settlement date i.e. last Thursday of the month.

What are Future and Options?

Both Futures and Options are derivative products.

The main difference between futures and options is that the buyer of the futures contract has the right and is also obligated to buy the underlying asset on the particular date in the future.

It is a leverage product where the traders get unlimited profits or losses depending on the movement of the prices.

Whereas the buyer of the options contract has the right but does not have the obligation to buy the underlying asset on the particular date. For this, the buyer has to pay a premium to the seller.