What is the difference between futures and options? Option: Option is a one-way contract. After paying the premium, the buyer of the option can perform or not perform option contracts's rights, and does not have to bear the obligation.
Futures: The rights and obligations of both parties to a futures contract are equal, that is, when the contract expires, both parties to the transaction are obliged to deliver the expired futures contract. The holder must buy and sell the subject matter at the agreed price (or make cash settlement).
Option: T+0 trading mode, you can do two-way trading, you can buy up and buy down, and you will not be forced to close positions, explode positions or add principal during the contract period.
Futures: T+0 trading, or two-way buying and selling. Futures trading is prone to short positions, which will be forced to close positions and require additional margin.
What is futures? Futures and spot are completely different. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts based on some popular products such as cotton, soybeans and oil and financial assets such as stocks and bonds. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
What are options? Option refers to a contract that gives the holder the right to buy or sell assets at a fixed price on or before a certain date.
The subject matter of an option refers to the assets you choose to buy or sell. Including stocks, national debt, currency, stock index, commodity futures and so on. Options are derived from these subject matter, so they are called derivative financial instruments. It is worth noting that the option seller does not necessarily own the underlying assets.
Options trading operation points options have time limit! Many investors may forget this in actual combat. Remember: time is the friend of the option seller and the enemy of the option buyer. Options are like ice in the sun. If one day their value decreases, they will become waste paper after they expire.
Therefore, it is recommended that the buyer try to avoid holding overnight. First, every day will lose the value of a day, especially the contract that is about to expire. Secondly, there is great uncertainty overnight, especially in the recent market fluctuations, and a high opening and a low opening will be considerable.