What's the difference between futures and options?
Asked 5 years ago
The stock market has got all sorts of interesting rules with rights and obligations, etc. I'm not sure I really understand the difference between options and futures. How and when would I use a future vs. option?
Andia Rispah Igobwa
Monday, November 01, 2021
A Future is an obligation and a right to buy or sell an underlying stock/assets at a predetermined price and deliverable at a predetermined time.
Options are a right but without an obligation to buy or sell equity or index at a predetermined price or time. You can either have a Call option (right to buy) or a Put Option (right to sell)
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