Difference between the futures and options

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Accepted Answer

Futures are contracts to buy or sell assets at a future date, while options give the holder the right but not the obligation to buy or sell assets at a set price.

Futures involve an obligation to buy or sell the underlying asset at a specified price and date.
Options give the holder the right, but not the obligation, to buy or sell the underlying asset at a set price within a specified time frame.
Futures are standardized contracts traded on exchanges, while options can be traded both on exchanges and over-the-counter.
Futures are often used for hedging or speculation on price movements, while options are commonly used for hedging or generating income through premiums.
Examples: Buying a futures contract for gold means you are obligated to buy gold at a set price in the future. Buying a call option on a stock gives you the right to buy the stock at a specified price within a certain time frame.

Difference between the futures and options

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