The difference between financial options and financial futures 1, the subject matter is different, and the subject matter of financial options and financial futures is also different. Generally speaking, all financial commodities that can be traded in futures can be traded in options. However, financial products that can be traded as options cannot be traded as futures. In practice, there are only financial futures options, but not financial options futures, that is, there are only financial options transactions with financial futures contracts as the subject matter, and there are no financial futures transactions with financial options contracts as the subject matter. Generally speaking, the subject matter of financial options is more than financial futures.

With the development of financial options, its subject matter tends to increase. Many things that cannot be traded in financial futures can be used as the subject matter of financial options, and even the financial option contract itself has become the subject matter of financial options, which is the so-called compound option.

2. The symmetry of investors' rights and obligations is different.

The rights and obligations of both parties in financial futures trading are symmetrical, that is, for either party, there are both rights and obligations to be performed by the other party. However, in the transaction of financial options, there is obvious asymmetry between the rights and obligations of both parties. The buyer of the option has only rights but no obligations, and the seller of the option has only obligations but no rights.

3. Different performance guarantees

Both sides of financial futures trading need to open a margin account and pay the performance bond as required. In the transaction of financial options, only the option seller, especially the seller of unsecured options, needs to open a margin account and pay the margin according to the regulations to ensure the fulfillment of obligations. For the option purchaser, because option contracts has not agreed on his obligations, he doesn't need to open a margin account, so he doesn't need to pay any margin.

4. Different cash flows

There is no cash receipt and payment relationship between the two parties in financial futures trading, but after trading, due to the daily settlement system, both parties will generate cash flow due to price changes, that is, the balance of the margin account of the profit party will increase, while the balance of the margin account of the loss party will decrease. When the balance of the loss-making margin account is lower than the prescribed maintenance margin, the additional margin must be paid in time according to the regulations. Therefore, both sides of financial futures trading must maintain certain highly liquid assets in case of emergency.

In financial option trading, the option buyer must pay a certain option fee to the option seller in order to obtain the rights granted by option contracts; However, after the transaction, there is no cash flow between the two parties except the due performance.

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.

6. The function and effect of hedging are different.

Financial options and financial futures are common hedging tools, but their functions and functions are different.

People use financial futures to hedge, while avoiding the losses caused by unfavorable price changes, they must also give up the benefits that may be obtained by favorable price changes. People use financial options to hedge, and if the price changes adversely, the hedger can avoid losses by exercising options; If the price changes favorably, the hedger can protect the interest by giving up the option. In this way, through financial option trading, we can not only avoid the losses caused by unfavorable price changes, but also retain the benefits brought by favorable price changes to a considerable extent.

However, this does not mean that financial options are more favorable than financial futures. This is because, from the perspective of hedging, financial futures are usually more effective and cheaper than financial options, and it is not easy to really hedge and make profits in financial options trading.

So financial options and financial futures can be said to have their own advantages and disadvantages. In real trading activities, people often combine them to achieve a specific purpose through a certain combination or collocation.