Options Vs. Futures: Similarities and Differences

[Jojo]

Options and futures are derivatives offering leverage and hedging. Both allow speculation on asset prices, like stocks or commodities. Differences lie in obligations: futures (e.g., oil futures) require buying/selling at contract expiry, while options (e.g., Apple call options) give the right but not obligation to transact. Futures carry higher risk due to mandatory execution, while options provide more flexibility with potential limited losses (premium paid).