Difference between Cash and Future Market
| BASIS FOR COMPARISON | CASH MARKET | FUTURE MARKET |
| Meaning | A place where financial instruments are traded, wherein the delivery of stock takes place. | Future market is a place where only future contracts are bought and sold at an agreed date in the future and at a predefined price. |
| Ownership | When you buy shares and take delivery, you become shareholder of the company till you hold the shares. | You can never be a shareholder when you trade in Futures. |
| Delivery | It is done on T+2 days. | No delivery takes place as the Future contract expires on expiration date. |
| Payment | Full amount needs to be paid at the time of buying shares in cash. | Only margin money requires to be paid for initiating Future contract. |
| Lot size | One can buy even single share of company. | One has to buy a minimum lot size which is already defined. Such as in case of NIFTY lot size is 75. |
| Holding period | In cash market you can buy shares and hold for life. | In futures, you have to settle the contract on the expiration date i.e. maximum of three month. |
| Dividends | When you are shareholder of the company, you are entitled to receive dividend. | In future contract you are not entitle for any dividend. |
| Objectives | People buy shares in cash market for investment purpose | Futures can be traded for Arbitrage, hedging or speculation purpose. |
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