1, the difference between forward and futures:
1) Trading places are different. Futures contracts are traded on the exchange, which is open, while forward contracts are traded outside the exchange. ?
2) The normative nature of the contract is different. Futures contracts are standardized contracts, and the variety, specifications, quality, delivery place and settlement method of the contracts are uniformly stipulated except the price. All matters of the forward contract shall be determined by both parties through consultation.
3) Different transaction risks. Futures contracts are settled through a special settlement company, which is a third party independent of buyers and sellers. Investors are not responsible for each other, there is no credit risk, only the risk of price changes. The risk of forward contract comes from whether the other party really performs the contract at that time and whether it can pay after physical delivery, that is, there is credit risk.
4) The deposit system is different. Both parties to a futures contract pay the deposit in accordance with the prescribed proportion, while a forward contract is determined by both parties because of the deposit or deposit, which is not uniform.
5) Different responsibilities. Futures contracts have hedging mechanism, large performance space, extremely low physical delivery ratio, and the transaction price is limited by the minimum price change unit and daily trading amplitude. If the forward contract is to be cancelled midway, both parties must agree. No unilateral will can terminate the contract, and the proportion of physical delivery is extremely high.
6) Futures have a daily debt-free settlement system. If both futures and forwards rise by 100 yuan, the profit of futures is 100 yuan, while the profit of forwards is the discounted value 100 yuan.
7) Different ways of expression. There are two execution modes of futures trading: physical delivery and hedging liquidation, and the final execution mode of forward trading is physical delivery.
2. The difference between options and futures.
1) The theme is different. The subject matter of futures trading is commodities or futures contracts, and the subject matter of option trading is the right to buy and sell options of commodities or futures contracts.
2) The symmetry of investors' rights and obligations is different. Futures contract is a two-way contract, and both parties have to bear the obligation to deliver the contract at maturity; Option is a one-way contract, and the buyer has the right to perform or not to perform the contract after paying the insurance premium.
3) Different performance guarantees. Both buyers and sellers of futures contracts have to pay a certain amount of performance bond, and only the seller is required to pay performance bond in option trading.
4) Different cash flows. In option trading, the buyer pays the insurance premium to the seller, and the option contract can be circulated to deliver the option; In futures trading, both buyers and sellers need to pay the initial margin, and the additional margin is charged to the losing party according to the price change during the trading period.
5) The profit and loss characteristics are different. The buyer's income of options changes with the change of market price, and the loss is limited to the insurance premium of buying options, while the seller's income is the insurance premium of selling options, and the loss is not fixed; Both sides of futures trading are faced with unlimited profits and endless losses.
6) Different termination methods. Futures trading can be closed or delivered in kind to end the transaction; There are three ways to terminate option trading: liquidation, execution and expiration.
7) The contract quantity is different. The number of futures contracts is fixed and limited. There are a large number of option contracts.
8) The hedging effect is different. Use futures to hedge and transfer unfavorable and favorable risks; The use of option hedging will only transfer adverse risks and retain favorable risks.
Extended data:
Option: Option refers to the right to trade a certain amount of financial assets at a specific time and at a specific price.
Forward: refers to the commitment of both parties to buy or sell a certain amount of subject matter at a specific price in the future (the subject matter can be physical commodities such as soybeans and copper, or financial products such as stock index, bond index and foreign exchange).
Futures: a standardized forward contract, which is formulated by a futures exchange and stipulates that a certain amount of subject matter shall be delivered at a specific time and place.
1, convergence of futures and forwards
Buyers and sellers agree to buy and sell a certain number of products at an agreed price at a certain time in the future, and futures trading is developed on the basis of forward trading.
2. The connection between futures and options
1) Both transactions are characterized by buying and selling forward standardized contracts;
2) The futures market price has an influence on the determination of the exercise price and premium of the option trading contract.
3) The maturity multiplier and complete rules in the futures market create conditions for the emergence and development of option trading. Option trading expands and enriches the trading content of the futures market.
reference data
Baidu Encyclopedia-Options
Baidu encyclopedia-futures
Baidu Encyclopedia-Forward Contract