Futures refers to forward "commodity" contracts. Closing such a contract is actually a promise to buy or sell a certain number of "goods" one day in the future. Of course, such "commodities" can be physical commodities such as soybeans and copper, as well as financial products such as stock indexes and foreign exchange.

take for example

If you want to buy baked wheat cake, but it will take four months to buy it, but you don't know what the price will be after four months.

So you first sign a contract with the seller of baked wheat cake to lock the transaction price of baked wheat cake after four months. After four months, you must buy baked wheat cakes at the price of 5 yuan.

In this way, the price of baked wheat cake can be controlled within the expectation, and the risk of not buying baked wheat cake or buying baked wheat cake at a high price after four months is reduced.

Similarly, for the seller of baked wheat cake, he is also worried about the market and risk of baked wheat cake after 4 months. He wants to lock in a market now and achieve the expected income. When both buyers and sellers have the will, the deal is made.

You have the obligation to buy baked wheat cakes, and the other party has the obligation to sell baked wheat cakes.

If after 4 months, the baked wheat cake on the market rises to 8 yuan, and you buy it at the price of 5 yuan, then you earn 3 yuan.

But the sesame seed cake is reduced to 2 yuan, and you still need 5 yuan to buy it, because the contract has been signed.

What are options?

Option is a kind of option, which refers to the right to buy or sell a certain quantity of a certain commodity at a certain price at a certain time in the future. Simply put, for the buyer, it is a kind of "right" that the "future" can choose to implement or not. The seller of the option has only the obligations stipulated by option contracts.

Or give a chestnut.

Or sign a contract with the seller of baked wheat cake, and buy baked wheat cake at the price of 5 yuan four months later.

Unlike futures, you can buy options from the seller for 50 cents.

Because you spent 50 cents on the option, the seller of baked wheat cake is obliged to sell it to you after 4 months, and you have the right to choose whether to buy it or not.

When sesame cakes rose to 8 yuan, they were bought at the price of 5 yuan.

You can choose not to buy sesame cakes when the price drops to 2 yuan.

This can compensate the loss of the seller, and the loss of the option fee is less than the loss of the market.