![]() ![]() There are some nuances around exercising options for indices versus stocks as well as different rules in different markets. In case of options, while there are variations, you can exercise some options any time till it’s the expiration date. Whereas options give the buyer the right, but not the obligation, to exercise the contract.ĭate of trade: A futures holder must trade the security at the agreed-upon date. ![]() ![]() Obligation: Futures represent a commitment to trade that must be squared off at the specified date. Here are some key differences between the two: Both derive their value from an asset known as the underlying such as shares, commodities, exchange traded funds (ETFs), share market indices, and others. Difference Between Futures and OptionsĪlthough these twin stock derivatives share some commonalities, they are also markedly different in certain key respects. While many people deal in futures and options through a trader, it is always advisable to understand their functioning before you invest in them. ![]() However, the actual futures and options trade is often far more complex and fast-moving. By specifying the price of the trade, these twin derivatives safeguard the investor against future fluctuations in the stock market. Futures and options are stock derivatives that are traded in the share market and are a type of contract between two parties for trading a stock or index at a specific price or level at a future date. ![]()
0 Comments
Leave a Reply. |