Futures trading is based on forward delivery contracts, which can prevent market changes and provide price protection. The main difference between the two is that:

The object of futures trading is commodity futures contract; The object of option trading is a right.

Futures trading is a two-way contract, and both parties have obligations to perform unless they close their positions before the delivery date; Option trading is a one-way contract, which only gives the buyer the right to decide whether to execute the contract, and the seller can only obey the buyer's decision.

Futures prices change all the time, and there are gains and losses every day. Due to the daily settlement system, both parties to the transaction have cash flow due to price changes. The strike price of option trading is determined in advance, and the contract price is the option fee paid by the buyer, which will not change within the specified period, and there will be no cash flow between the two parties before the expiration of the period.

Both sides of futures trading have obligations to perform, so they all need to pay a deposit; Option trading buyers only pay option fees; The seller has the responsibility to perform the contract and needs to pay a deposit.

Futures trading does not need to pay cash, but only needs to pay a small amount of margin, which is paid when it is delivered at maturity, and most traders close their positions before maturity, so it is not a cash transaction; Option trading needs to pay more cash than futures trading margin as option fee, so it is close to cash contract.

Both sides of futures trading face the same investment risk and income, and the risk is infinite for both sides; In option trading, the buyer's risk is limited, only the option fee he pays, the profit is infinite, and there is no need to pay the purchase price immediately; The seller's profit is limited, only the option fee income, but the risk is unlimited.

Futures trading has leverage; Option trading can set the investment risk in a tolerable region, which has stronger leverage than futures trading.

Most futures transactions are completed before the delivery date; When the option transaction expires, the option contract will be executed, abandoned or transferred.

Option trading is not in the exchange, so it is more flexible than futures trading, which contributes to capital turnover and improves the rate of return on capital for traders with existing stocks or positions.

Using futures trading to hedge, while avoiding the losses caused by unfavorable price changes, we should also give up the benefits that may be obtained from favorable price changes; Using option hedging, if the price change is favorable, the loss can be avoided by executing the option, and if the price change is unfavorable, the option can be abandoned to protect the vested interests.