1. Subject matter: The subject matter of futures trading is the standard futures contract; The subject matter of option trading is a right to buy and sell. After purchasing the right, the buyer of the option gets the option. You can exercise the right to buy or sell the underlying assets within the agreed time limit, or you can give up exercising the right; When the buyer chooses to exercise his rights, the seller must perform the contract.
2. Rights and obligations of investors: Futures contracts are two-way contracts, and both parties to the transaction are obliged to make delivery when the futures contracts expire. If you are unwilling to actually deliver, you must hedge within the validity period. The option is a one-way contract. After paying the option premium, the buyer of the option has the right to perform or not to perform the option contracts, without having to undertake obligations.
3. Performance bond: In futures trading, both buyers and sellers of futures contracts have to pay a certain percentage of deposit. In option trading, the biggest risk of the buyer is limited to the paid royalties, so there is no need to pay the performance bond. However, the risk faced by the seller is greater, and the seller must pay the deposit as the performance guarantee.
4. Profit and loss characteristics: Futures trading is a linear profit and loss state, while both sides of the transaction are faced with unlimited profits and endless losses. Option trading is a nonlinear profit and loss state, and the buyer's income fluctuates with the fluctuation of market price, and its maximum loss is limited to the premium of purchasing options; The loss of the seller fluctuates with the fluctuation of the market price, and the biggest gain (that is, the biggest loss of the buyer) is the commission.
5. Function and function: The hedging of futures is not for futures, but for the physical object (spot) of the underlying financial instruments of futures contracts. Because futures and spot prices will eventually converge, hedging can achieve the effect of protecting spot prices and marginal profits. Options can also be hedged. For the buyer, even if he gives up the performance, he only loses the insurance premium and protects the value of his purchase funds. For the seller, either the goods are sold at the original price or the insurance premium is guaranteed.