A Futures Contract is a legally binding agreement to buy or sell any underlying security at a future date at a pre determined price. The Contract is standardised in terms of quantity, quality, delivery time and place for settlement at a future date. Both parties entering into such an agreement are obligated to complete the contract at the end of the contract period with the delivery of cash/stock.
Stock options are not ownership in anything; unlike stocks, the holder of an option doesn’t possess part ownership in a company; this is simply an agreement between two investors that one party agrees to deliver something to another party within a specific time period and for a specific price. This eliminates the ownership part of the agreement as well as the idea that you must possess a particular stock in order to implement a position.
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