CEVAP:

Two most common two forms of derivatives are options and forwards or futures contracts. Investing in an option contract gives the investor the right, but not obligation, to buy or sell a predetermined quantity of financial instruments in future at a specified price. While a call option gives right to buy instruments, a put option provides the selling right. If the price of asset does not move in the expected direction, an investor does not exercise the promise and loss is limited to initial margin invested to buy the contract. In the forward contracts, on the other hand, an investor promises to deliver a specified quantity of stocks or commodities at a specified price at maturity for an agreed-upon price. If the price of asset goes in the expected direction an investor generates profit, if the price moves in the opposite direction an investor makes loss.