Both options and warrants are derivatives traded in exchange and give investors an option to buy at pre agreed date and price. The main differences between two are warrants are financial instruments whereas options are contracts. Values ascertained from livestock’s, bullion etc.OptionsThese are derivative securities in the fundamental category in which one party acquires right buy or sell but not right to obligation buy or sell at strike price at a particular date. Option buyer has the right to buy or sell security whereas option seller is the one who confers.Option premium is charged by seller to buyer. The underlying ... Read More

Investors have different options to invest their money in stock markets. One of them is the options category of securities in which they trade their securities at agreed date and price.Options are sub divided into the following −Call optionIn this option buyer has the right to buy assets at strike price at a particular date. To acquire call option investors have to pay some upfront cost call premium through which they can get the right to purchase a product at a fixed price on a particular date. Stocks, currencies, bonds etc. covered in call options.ExampleLet’s say, a buyer and seller ... Read More

Both options and swaps are derivatives of financial instruments. Both values depend on the underlying asset.OptionsRight to buy or sell the asset at a pre agreed price at a particular date. Important terms used in this are exercise date, strike price and option premium. It is in the non-recoverable amount.Exercise date - Date on which option should be exercised.Strike price - Price at which option should be exercised.Option premium - Price paid to acquire option.The types of options are as follows−Call option - At pre agreed date and price, buyer has right to buy financial asset.Put option - At pre ... Read More

Financial derivatives are categorized into forward contracts, futures contracts, options and swaps. Futures can be understood as legal binding of trade at a future date at an agreed price. On the other hand options are investors have the right to buy or sell products in stipulated time at pre specified price.Future contractFuture contract is the contract between involved parties to buy or sell financial assets at a set price at a future agreed date. Key elements in future contracts are date, buyer, seller and price.These are transferable and standardized contracts. These are traded in NYSE/NASDAQ/BASE/NSE. It includes currencies, stocks, commodities ... Read More

Let us learn about the tort and contract before understanding the differences between them.ContractIt is a set of promise/promises which is legally enforced between parties. These are enforceable if any party is affected or injured then they are allowed to access legal remedies.A contract consists of offer, acceptance of offer and considerations and mutual agreements. According to contract law, it recognizes and governs rights and duties which arise from agreements or contracts between parties.Some contracts can be orally binding. Formalities in most contracts are signing, entering date of signed contractTortTort is nothing but any wrongful act which leads to legal ... Read More

Before going for comparison between bid and offer price, let us first try to understand the concept of bid price and offer price with an example.Let us a vendor offer a price for a T-shirt of Rs.500/- and the customer starts bidding at Rs.300/- then spreads the value of Rs.200/- . In reality bid amount and incremental changes are not the same.From the above example, the customer will not bid directly 300/-, initially he will go for less than 300 and gradually he ends up in 300 and ends the bid. If there is only a single bidder then the ... Read More

Let us learn about the offer and quotation before understanding the differences between them.OfferIt is an expression to show his/her willingness to do something for another to do or not to do. It is the first in contract. Offer must be certain, complete and defined. Offer is legal binding between parties.The types of offers are as follows −Express offer - It is the most usual form of offer in which communication is clear & unequivocal.Implied offer - Communication is not through words.Counter offer - In this type of offer, the modifications are made to the original offer.Cross offer - The ... Read More

Let us learn about the contracts and quasi contracts before understanding the differences between them.ContractsIt is an agreement between more than one party. Contracts are made with lawful considerations and objects between parties.The essential elements in the contracts are as follows −Legitimate offer followed by acceptance.Agreement should not be void or illegal.Minimum two parties are required and above 18 years of age.They should create legal relationships.Should have lawful considerations.Objective of the contract should be lawful etc.Quasi contractsQuasi contracts are pseudo contracts which means technically speaking, there is no contract but resembles one.The elements of quasi contract are as follows −Though ... Read More

Express contracts and implied contracts are two categories of a contract. Express contract illustrates promises made between parties with terms and conditions made clear.Implied contracts are made between parties based on behaviours of parties. Elements of express contracts are offer and acceptance. Implied contracts don’t have any written contract. These contracts happen due to circumstances.Express contractIn these contracts parties state terms and conditions either in written form or in orally. In other words agreement offers and acceptances are communicated either in written form or verbally.ExampleA party has offered to another party to install a carpet for payment of Rs.5000/-. Here ... Read More

Let us learn about costing and cost accounting before understanding the differences between them.CostingIt is the Process of cost determination and recording. There are various types of cost classifications. Costs are mainly classified into two types namely, function and behaviour.Function (costs) is sub divided into manufacturing and non manufacturing (selling and administration). Manufacturing costs are again classified as direct costs (material, labour) and indirect costs (overheads).>Behaviour costs are sub classified into fixed costs, variable costs and semi variable costsDirect costs − Clearly identified (direct material, direct labour, commissions).Indirect costs − Overhead costs (rent, office expenses, accounting expenses).Fixed costs − Costs ... Read More