The differences between individual stock options and futures:

1. The degree of symmetry between returns and risks is different

In the options trading market, the risks and returns of investors is asymmetrical. The option buyer bears limited risk (limited by the premium paid), and the profit may exceed the premium paid, and in theory can even be unlimited (in the case of buying a call option); the option seller has limited The income (limited by the premium received), while its potential risk may exceed the premium received, and may even be theoretically unlimited (in the case of selling call options). The profit and loss risks borne by buyers and sellers of futures contracts are symmetrical.

2. Different margin systems

In individual stock options trading, the option seller should pay a margin, but the option buyer does not need to pay a margin; in futures trading, both the buyer and the seller A certain deposit is required as a guarantee.

3. The trade-off between hedging and profitability is different

In hedging operations using individual stock options, investors can lock in and manage risks while also reserving further profits. space, that is, when the underlying stock price moves in an unfavorable direction, risks can be locked in time, and when it moves in a favorable direction, profits can be made; when investors use futures for hedging operations, they avoid adverse risks while also giving up changes in returns. Possibility of growth.

4. The rights and obligations of the parties are different

The individual stock option contract is an asymmetric contract. The buyer of the option only has rights but does not assume obligations, and the seller only assumes obligations but does not enjoy rights. When the option contract expires, the buyer of the option contract has the right to choose to buy or sell the underlying security at the agreed price; the rights and obligations of both parties to the futures contract are equal. When the futures contract expires, the holder must follow the agreed price. Price to buy or sell the underlying (or settle in cash).