In finance, derivative means a security whose price is dependent on or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties, with a value determined by fluctuations in the underlying asset, which could be stocks, bonds, commodities, currencies, interest rates, and market indexes.
Futures contracts, forward contracts, options, and swaps are the most common types of derivatives. Since derivatives are contracts, almost anything can be used as a derivative's underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region.
A futures contract gives its buyer the obligation to purchase the underlying asset and the seller to sell (and deliver) it at a preset date. (If the futures holder liquidates his position prior to expiration, the delivery clause is voided, obviously.)
By contrast, an options contract, whether a call (buy an asset) or put (sell an asset), grants the holder the right - but not the obligation - to exercise the option. The holder is entitled to simply let the option expire without investing further.
Investors can enter futures contracts by paying upfront margin only (ignoring any commission), but an option always carries a cost - the 'premium'.
 KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process againwhen you approach another intermediary.  Prevent Unauthorised Transactions in your Trading/Demat account Update your Mobile Number/email IDs with your Stock Broker/Depository Participant. Receive information/alerts of all debit and other important transactions in your Trading/Demat account directly from Exchange/NSDL on your registered mobile/email on the same day.  No need to issue cheques by investors while subscribing to IPO. Justwrite the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
Clients can send in their grievances to: firstname.lastname@example.org