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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.

How Are Futures Contracts Different from Options Contracts?
What Is “Proof-of-Stake” (PoS)?
How Does a Futures Contract Differ from an Options Contract?
What Are the Key Differences between a Futures Contract and an Options Contract?

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.

How Do Options Contracts Differ from Futures Contracts in Financial Derivatives?
Why Is the Maximum Loss for an OTM Option Buyer Limited to the Premium Paid?
What Are the Key Differences between a Futures Contract and an Options Contract?
How Do Options Differ from Futures in Terms of Obligation?