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Differences between futures theory and practice
5. The characteristics of profit and loss are different.

Neither side of the financial futures trading has the right to breach the contract or require early delivery or delayed delivery, and can only hedge through reverse trading at any time before the expiration or make physical delivery at the expiration. However, before hedging or due delivery, price changes will inevitably make one party profitable and the other party lose money, and the degree of its profit or loss depends on the extent of price changes. Therefore, theoretically speaking, the potential gains and losses of both sides of financial futures trading are infinite.

On the contrary, in financial options trading, because of the asymmetry of rights and obligations of options buyers and sellers, their profits and losses in trading are also asymmetric. Theoretically speaking, the potential loss of the option buyer in the transaction is limited, limited to the option fee paid, but the possible profit is unlimited; On the contrary, the profit of the option seller in the transaction is limited, limited to the option fee charged, but the possible loss is infinite. Of course, in the real option trading, because the option contract is rarely executed, the option seller is not always at a disadvantage.