How Are Futures Contracts Different from Options Contracts?
Both are derivatives, but a futures contract is an obligation to buy or sell an asset at a set price on a future date. An options contract is a right, but not an obligation.
Futures contracts are settled daily through mark-to-market accounting, requiring margin maintenance. Options require only the premium payment upfront, and the risk/reward profile is fundamentally different.
Glossar
Premium Payment
Consideration ⎊ Premium Payment, within cryptocurrency derivatives, represents the capital outlay required to establish a position, fundamentally functioning as the price of optionality or risk transfer.
Futures Contracts
Mechanism ⎊ Futures contracts, within cryptocurrency and broader financial derivatives, represent standardized agreements obligating parties to transact an asset at a predetermined price on a specified future date; these instruments facilitate price discovery and risk transfer, extending beyond traditional commodities to encompass digital assets and complex financial indices.