The difference between options and futures
1, the rights and obligations of the buyer and the seller
In futures contracts, buyers and sellers agree on equal rights and obligations, while in option contracts, the rights and obligations of buyers and sellers are not equal. The option buyer can choose to exercise or give up his rights, but the option seller has the obligation to perform.
Take the upcoming soybean meal as an example, assuming the term is 1 month and the price is 2000 yuan. Because if it is an option contract, investors can choose to buy soybean meal at the agreed price of 2000 yuan a month later, but if investors feel that the price is not suitable, they can also choose not to buy it. Futures contracts are different. After the expiration of one month, regardless of the price of soybean meal, it needs to be purchased according to the agreed 2000 yuan.
2. Deposit and royalties
In option trading, the buyer pays the royalty and the seller pays the deposit as the performance guarantee. In futures trading, both parties need to pay margin.
3. Profit and loss risk
In option trading, the buyer's biggest loss is commission, but the profit is uncertain. On the other hand, the seller has the largest expected royalty income, but the loss is uncertain. Therefore, buyers and sellers are not equal in expected returns and risks. In futures trading, the profit and loss of both buyers and sellers are uncertain.