Forward trading and option trading are two ways for buyers and sellers to trade, and the choice of trading method is conducive to the normal trading. Forward trading and option trading are both related and different in terms of trading mode, trading place and trading default. Before trading, both parties should know the differences of these transactions in detail, which is beneficial to normal trading and to both parties. Moreover, the choice of transaction mode needs to be judged according to the wishes of both parties, which guarantees the rights and interests of both parties to a certain extent.

1. What are forward trading and option trading?

Forward transaction refers to the signing of forward contracts between buyers and sellers, which is a way for both parties to agree to conduct transactions in a certain period in the future. The object of forward transaction is non-standardized contract, and physical delivery is its manifestation, which is lack of liquidity and high credit risk. Option: A contract that gives the option purchaser the right to deliver financial assets at an agreed price and manner at a certain time in the future.

Second, the difference between forward trading and option trading

Forward transaction refers to the transaction mode in which buyers and sellers sign forward contracts and agree to conduct transactions within a certain period in the future. The characteristics of forward trading are: in the foreign exchange market, the tools of forward business are contracts with fixed format and binding force. Option trading is a non-standardized contract negotiated privately by both parties, which mainly adopts the way of commodity delivery and has high credit risk. Option is a derivative financial instrument based on futures. The characteristics of option trading: it has the characteristics of zero-sum game, and individual stock options and index options can be combined for arbitrage trading or hedging trading.

To sum up, forward trading and option trading are both related and different trading methods. However, the transaction method is discussed by both parties, and the final decision of the transaction is in the hands of both parties. Therefore, once an abnormal transaction occurs, both parties to the transaction should bear the corresponding risks themselves, and do not question the transaction method.