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difference between options and futurs



difference between options and futurs..

Answer / d.k.d

The primary difference between options and futures is that
options give the holder the right to buy or sell the
underlying asset at expiration, while the holder of a
futures contract is obligated to fulfill the terms of
his/her contract.

in case of options, for a buyer (or holder of the option),
the downside is limited to the premium (option price) he has
paid while the profits may be unlimited. for a seller or
writer of an option, however, the downside is unlimited
while profits are limited to the premium he has received
from the buyer.

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