How option contract differ from future contract?

[Praveen Kumar Ramachandran]

<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>The future contract provides rights to buyer and Seller with obligations.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>In option contract only the buyer gets the rights and also do not have any obligations</p>

[Divya]

Option Contract – is one where buyer alone gets rights. If it is Call option the buyer gets the right to buy and if it is Put option the buyer gets rights to sell. Seller gets a premium for signing the contract.
Future – is one where both buyer and seller have rights (buyer has buying rights and seller has selling rights) and both pay a minimum amount while signing the contract. The settlement should happen even if one of the parties approach the exchange.

[Parthasarathy J]

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in future contract both buyer and seller has equal rights. buyer has obligations.

in option contract only buyer has the rights.buyer doesn’t have any obligations.

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[Anitha Ramesh]

In futures, the buyer and seller get the right to buy and sell shares accordingly on the expiry of the contract.The settlement will be done on day to day basis.The buyer and seller have obligation.

In options,”call option”,the buyer gets the “right to buy” asset from the seller of the contract,if it hits the strike price.

But,he does not have obligation. The buyer has to pay premium to the seller of the contract.

“put option@,the buyer gets the “right to sell” asset from the seller of the contract,if it hits the strike price.

But,he does not have obligation. The buyer has to pay premium to the seller of the contract.

 

 

[Dipakk Mehta]

In future contract both buyer and seller has rights and obligations

whereas option contract only buyer has rights but no obligations

[Author]

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