when trading in the stock market. As financial contracts between the buyer and the seller of an asset, they offer the potential to earn huge profits. However, there are some key differences between futures and options.
Futures contracts have the buyer obligated to honor the contract, whereas in options contract, there is no obligation on the buyer to buy or sell. Futures require a higher margin of payment as compared to options. Future contracts are preferred by speculators, whereas options contracts are preferred by hedgers.