Employee stock option
1. Transaction object: The underlying asset of individual stock option is a single stock, that is, the stock of a specific listed company.
2. Rights and obligations: Individual stock options give the buyer rights, but they are not compulsory. You can choose whether to exercise the rights when they expire. When the buyer exercises his rights, the seller is obliged to execute the transaction.
3. Royalty: Stock option trading needs to pay royalties as the contract fee, that is, the cost of purchasing options.
4. Risks and benefits: The income potential of individual stock options is unlimited, but the loss is limited to the royalties paid.
futures index
1. Transaction object: The underlying assets of futures refer to an index, such as SSE 50 Index and CSI 300 Index, rather than a specific stock.
2. Rights and obligations: Futures contracts have no rights and obligations. When the contract expires, both the buyer and the seller must perform it and have no choice.
3. Margin: Futures refers to transactions involving the payment of margin to cover possible future losses, rather than paying royalties like options.
4. Leverage effect: Futures trading has leverage effect, and investors can control the underlying assets with greater value only by paying a small amount of margin.
There are some differences between individual stock options and futures index in terms of trading objects, rights and obligations, fees and so on. Individual stock options pay more attention to the trading of stocks of a single listed company. Investors can gain the rising income potential of stocks by purchasing rights, and at the same time limit the losses to the paid royalties.
Futures index focuses on the performance of the whole market index, and investors can gain income or take risks in the overall market trend through futures index trading. Investors should choose appropriate trading strategies according to their investment objectives and risk tolerance when trading options or futures.