For foreign exchange futures, you should be clear that futures do not buy and sell dollars directly with others, but buy and sell a standardized contract, which can be understood as buying and selling standardized forward foreign exchange trading contracts. Note that the subject matter here is the contract, and the subject matter above is the US dollar and RMB, which is the difference between them.
Foreign exchange options, note that options are a right. Foreign exchange option is a right to buy and sell foreign exchange futures, that is, you give someone a sum of money, and others agree to buy and sell an agreed number of foreign exchange options at a pre-negotiated price in a certain period (American option) or at a certain time in the future (European option). Of course, this decision is up to you, that is, the buyer of the foreign exchange option contract.
The differences are as follows:
(1) Forward can completely avoid risks, while futures and options generally cannot completely avoid risks.
(2) Only when buying futures, the basis difference between the spot price and the futures price is equal to the basis difference between the spot price and the futures price when the futures expire, can the risk be completely avoided.
(3) Options rarely completely avoid risks, and are costly but can enjoy the benefits brought by favorable exchange rate changes.
(4) Through the above comparison, we should choose the above three methods to avoid risks: when you are willing to bear higher costs and want to enjoy the benefits brought by exchange rate changes, that is, if you are not a risk averse, you should choose options; When you are a complete risk aversion, please choose long-term; Futures is a compromise choice.