One of the biggest differences between a futures option and a futures contract is that:_______

1 answer:

6 0

The biggest difference between options and futures exists that futures contracts need that the transaction specified by the contract must take place on the date specified. Options, on the other hand, provide the buyer of the contract the right — but not the obligation — to execute the transaction.

<h3>What is the difference between futures contract and options?</h3>

A futures contract is put into effect on the specified date. The buyer buys the underlying asset on this date. In the meantime, the buyer of an options contract is free to execute the agreement at any point before the expiration date.

You may therefore purchase the asset anytime you believe the circumstances are favorable. A futures contract gives the holder the option to purchase or sell a certain item at a predetermined price on a predetermined future date. Options allow the option to purchase or sell a certain asset at a specific price on a specific date, but not the obligation to do so.

Hence, The biggest difference between options and futures exists that futures contracts need that the transaction specified by the contract must take place on the date specified. Options, on the other hand, provide the buyer of the contract the right — but not the obligation — to execute the transaction.

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