Difference between option contract and future contract?

Question

Accepted Answer

Option contracts give the holder the right, but not the obligation, to buy or sell an asset at a specified price, while future contracts obligate the parties to buy or sell an asset at a specified price on a future date.

Option contracts provide the holder with the choice to exercise the contract or not, while future contracts require the parties to fulfill the contract at the agreed-upon terms.
Option contracts have a premium that the holder pays to acquire the right, while future contracts do not involve a premium.
Option contracts have a limited lifespan, while future contracts have a specified expiration date.
Examples: Buying a call option on a stock gives the holder the right to purchase the stock at a specified price within a certain timeframe. In contrast, entering into a futures contract for oil obligates the parties to buy or sell oil at a predetermined price on a future date.

Difference between option contract and future contract?

Top Invesco Data governance interview questions & answers

Top HR questions asked in Invesco Data governance