2. Different functions: The main functions of futures trading are to avoid risks and find prices. Although forward transactions can also regulate the relationship between supply and demand and reduce price fluctuations to a certain extent, the lack of liquidity of forward contracts limits their price authority and risk dispersion.
3. The symmetry of rights and obligations is different: futures contracts are two-way contracts, and both parties to the transaction are obliged to deliver futures contracts at maturity. The option is a one-way contract, and the buyer of the option obtains the option after paying the royalty, and can choose to execute the option or give up the execution without undertaking the obligation. When the buyer exercises his rights, the seller of the option has the obligation to buy or sell the underlying assets from the buyer as agreed.
4. The degree of standardization is different: the object of futures trading is the standardized futures contract uniformly formulated by the exchange, while the object of swap trading is the non-standardized contract reached by both parties through private consultation.
5. The relationship between the two parties to the contract is different: the swap agreement is directly signed by both parties to the transaction, and it is one-to-one. The default risk of swaps mainly depends on the credit of the counterparty, while futures trading is different. The performance of the contract does not depend on the counterparty, but on the role of the futures settlement institution as the central counterparty in futures trading.
Extended data:
Notes for option sellers:
1. Stop loss in time: Asymmetric leverage is an important feature of options, which also leads to limited returns but huge risks for option sellers. Therefore, timely stop loss is an investment discipline that option sellers must always keep in mind and strictly implement.
2. When there are adverse changes in the market, the seller can stop the loss in time through fixed price stop loss, technical index stop loss, psychological price stop loss and other ways. To ensure the long-term existence in the market. The setting of stop-loss line or stop-loss index should be determined by comprehensively considering market conditions, investment expectations and risk tolerance.
3. Position control is an iron law that option sellers must strictly abide by. Both selling and opening positions require a certain margin, and the amount of margin will be adjusted accordingly after the market changes. When investors sell options, they should strictly abide by the system of position restriction and purchase restriction, and reserve enough funds to cope with the possibility of additional margin when the market fluctuates in the short term, so as to avoid being forced to close their positions because of insufficient margin and losing potential profit opportunities in the later period.
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