Derivatives: Financial futures and financial options are derivatives in the financial market, and their value comes from the price of their underlying assets (such as stocks, indexes, currencies, etc.). ).
Leverage effect: both financial futures and financial options have leverage effect, so investors can participate in larger-scale transactions with less funds.
Standardized contract: both financial futures and financial options have standardized contracts, that is, the contract specifications uniformly stipulated by the exchange, including contract units, delivery dates, price calculation methods, etc. This makes the transaction more convenient and transparent.
Price discovery and hedging: both financial futures and financial options can be used for price discovery and hedging. Investors can use these tools to speculate or hedge the future price of the underlying assets to manage risks or make profits.
Market liquidity: Financial futures and financial options are usually listed and traded on exchanges, which provides high market liquidity and trading activity. Investors can buy and sell in the open market, and have a relatively easy counterparty choice.
Although financial futures and financial options have something in common, they still have some differences in contract nature, trading mode, risk characteristics and strategy application.