(2) There is no fixed place for forward contracts with different trading places, and both parties to the transaction look for suitable objects; Futures contracts are traded on exchanges, generally not allowed to be traded over the counter.
(3) The performance of forward contracts with different default risks can only be guaranteed by the credibility of both parties. Once one party is unable or unwilling to perform, the other party will suffer losses; The performance of futures contracts is guaranteed by the exchange or clearing company.
The difference between futures and options:
(1) The subject matter of different futures transactions is commodities or futures contracts, while the subject matter of option transactions is the right to buy and sell options on commodities or futures contracts.
(2) The symmetry of investors' rights and obligations is different. The option is a one-way contract, and the buyer of the option can perform or not perform option contracts's rights after paying the insurance premium, without having to bear the obligation; Futures contracts are two-way contracts, and both parties to the transaction have the obligation to deliver futures contracts at maturity. If you are unwilling to actually deliver, you must hedge within the validity period.
(3) Performance bond: Both buyers and sellers of different futures contracts must pay a certain amount of performance bond; In option trading, the buyer does not need to pay the performance bond, but only requires the seller to pay the performance bond, which shows that he has the corresponding financial resources to perform the option contracts.
(4) Different cash flows In option trading, the buyer has to pay the insurance premium to the seller, which is the price of the option, which is about 5% ~10% of the price of the traded commodity or futures contract; Option contracts can be circulated, and their insurance premiums will change according to the changes in market prices of traded commodities or futures contracts. In futures trading, both buyers and sellers have to pay an initial deposit of 5% ~ 10% of the face value of the futures contract, and during the trading period, they have to collect additional deposits from the losing party according to the price changes; The profitable party may withdraw the excess margin.
(5) The profit and loss characteristics are different. The income of the option buyer fluctuates with the change of market price, and its loss is limited to the insurance premium of the option; The seller's income is only the insurance premium of selling options, but its loss is not fixed. Both sides of futures trading are faced with unlimited profits and endless losses.
(VI) The role and effect of hedging are different. The hedging of futures is not about futures, but about the physical (spot) of the basic 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. There are no futures options in China, so you can refer to warrants, which are simple stock options. The operation of futures is just like the three major domestic transactions, most of which are varieties. The trading rules of various exchanges in the world are not exactly the same, but the principle is the same. You have to see what kind of products you are making, and then know the rules of this trading place in detail.