Option means that the buyer has the right to buy or sell a certain quantity of a commodity at a certain price at a certain time in the future after paying the option fee to the seller, but has no obligation to buy or sell (that is, the option buyer has the right to choose whether to buy or sell, and the option seller must unconditionally obey the buyer's choice and fulfill the promise at the time of trading).

Comparatively speaking, options only face the risk of loss of royalties, while futures may face the risk of short positions. Although both are leveraged investments. However, since the conclusion of the futures contract, investors are faced with the risk of market price changes. The market price only changes in two directions. Therefore, compared with the unknown market changes of futures, the risk of options is relatively smaller.

The risks of futures buyers and sellers are equal, and both parties may have the risk of short positions. The risks of options buyers and sellers are unequal, the risks of buyers are fixed, and the risks of sellers are infinite.

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Option investment risk

1. Capital risk level

In fact, the main financial risk that the option buyer needs to bear comes from the issue of royalties. Although the handling fee is also a sum, it is not enough to calculate the risk. The risk of royalty is that if the market is in the opposite direction to the buyer, the royalty of the option buyer may be completely lost, which is the part about the financial risk of the option buyer.

2. Risk of price fluctuation

When the option expires, the time value and franchise value of all contracts will disappear and eventually become zero, so it is very likely that the option price will suddenly fluctuate when the option expires. At this point, if the option buyer rashly trades the option, it is very likely that the loss will be swept away when the option expires and eventually become a bubble.

Futures investment risk

1. Position risk

Futures trading is prone to short positions. Every trading day, exchanges and futures companies will settle accounts. If the investor's margin is lower than the specified proportion, the futures company will force the liquidation as required. If there is a short position at this time, investors will suffer heavy losses.

2. Market risk

In the financial market, the spot price and futures price are generally similar at the time of delivery, which is also the basis for ensuring the futures market to play a hedging role, so that hedging can fully hedge the risks in the spot and futures markets. However, in the delivery of actual transactions, futures prices and current market prices often deviate from each other, making hedging impossible.

Option is a financial instrument, which gives the holder the right to buy or sell the underlying assets at a specific price at a specific time in the future, but not the obligation. Option trading mainly involves two kinds: call option and put option.

The following are some key concepts of option investment:

1. Rights and obligations:

-Rights: Option holders have rights, but not obligations, and can choose whether to exercise options. Rights include the right to buy or sell basic assets.

-Obligation: The seller of the option has the obligation to perform the option contract, that is, when the option holder chooses to perform the option, he must perform it according to the conditions stipulated in the contract.

2. Call options and put options:

-Call option: gives the holder the right to buy the underlying asset at a specific price in the future, expecting the asset price to rise.

-Put option: gives the holder the right to sell the underlying asset at a specific price in the future, expecting the asset price to fall.

3. Exercise price (exercise price):

-Exercise price: the price of the underlying asset to be bought or sold in the future as stipulated in the option contract. Also known as the strike price.

4. Deadline:

-Expiration date: the expiration date of the option contract, after which the option becomes invalid.

5. Option fee:

-Option fee: the price of options, including the intrinsic value and time value of options. Intrinsic value is the actual value after the option is exercised, and time value is the additional value before the option expires.

6. Intrinsic value and time value:

-Intrinsic value: the actual value of the option under the current market conditions is equal to the difference between the exercise price and the current market price.

-Time value: the value other than the intrinsic value of the option, which reflects the expected return of the market from asset price fluctuations before the option expires.

7. Open and closed positions:

-Opening positions: trading options and establishing new positions.

-Closing position: Closing the existing option position, either to achieve profit or to limit losses.

8. Insurance function:

-Insurance function of options: investors can use options as insurance to deal with market fluctuations and uncertainties.

Futures is a financial derivative that allows investors to buy or sell basic assets (such as commodities and financial instruments) and deliver them at a predetermined price at a future date. Futures trading is usually conducted on exchanges, including agricultural products, energy, metals, financial indexes and other targets.

Here are some key concepts related to futures investment:

1. Contract:

-Futures contract: an agreement indicating that investors agree to buy or sell the underlying assets at a specific price on a specific date in the future. Standardization of futures contracts, including contract specifications, delivery dates and delivery methods.

2. Long and short:

-Long position: Investors buy futures contracts in the hope that the price of the underlying assets will rise.

-Short position: Investors sell futures contracts in the hope that the price of the underlying assets will fall.

3. Deposit:

-Margin: A small part of the contract value that investors need to pay in futures trading to ensure the performance of the transaction. Margin is usually a certain proportion of the value of future positions.

4. Delivery:

-Delivery: When the futures contract expires, investors can choose to perform, that is, deliver the physical assets at the price stipulated in the contract.

5. Exchange:

-Futures Exchange: provides a place for trading standardized futures contracts to ensure the transparency and fairness of the market.

6. Lever:

-Leverage: Futures trading allows investors to control large positions with relatively small funds, thus improving the profit potential, but also increasing risks.

7. Close the position:

-Closing positions: Investors can close their positions or close their existing future positions, which can be profitable or stop-loss.

8. Location restrictions:

-position limit: the maximum number of positions held by investors in the same futures contract as stipulated by the exchange.

9. Delivery month:

-Delivery month: the delivery month stipulated in the futures contract.

10. Basis:

-Basis: the difference between the spot market price and the futures contract price.

1 1. Rolling contract:

-Rolling contracts: Before futures contracts expire, investors adjust their positions from contracts in recent months to contracts in the next few months.