Difference Between Futures And Options

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Futures:

  • Future contract is a binding agreement for buying and selling of a financial instrument at a predetermined price at a future specified date.
  • Require higher margin than options.
  • The Date is specified in the contract.

Options:

  • Options are the contract in which the investor gets the right to buy or sell the financial instrument at a sell price, on or before a certain date, however the investor is not obligated to do so.
  • Require Lower Margin than Futures.
  • Can be purchased anytime before the expiry date specified in the contract.