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OPTION | FUTURE CONTRACTS |
---|---|
Options are a type derivative that derives value from an underlying instrument | Future Contracts are a type of derivative that derives value from an underlying instrument. |
The contract does not give the investor any obligation to sell or buy before it expires. Only the buyer or seller is obligated to buy or sell. | Future contracts must be agreed upon by the sellers and buyers. |
Sell and buy at the strike price | You can buy and sell at a future price that is acceptable. |
Retail investors can trade in a specified quantity. | It is a great resource for institutional investors who want to trade large quantities. |
Options are safer than futures. | Options are riskier than futures, but they're comparatively safer than Futures |
Buyers can receive unlimited profits but a limited loss contract. | Buyers can make unlimited profit and loss |