How option contract differ from future contract?

[Vineet Kumar Nair]

In option contract, the buyer has the rights to either buy or sell and has no obligations but the seller has no rights and only obligations.

In future contracts, the buyer and seller; both has rights and obligations.

[Raja Kannan]

Future Contract : Both have obligations to execute the contract irrespective of gain (or) loss.

Option Contract : Buyer has the right to buy but no obligation ( NOT Compulsory)

[Ganesh]

Future contract is entering into a contract where buyers and sellers agreed to execute a deal on a future date. Here both buyers and sellers have rights and obligations.

Options contract is buyer getting more benefit such as right to buy/sell without obligation and pays a premium to the seller for the same.

 

[Guru]

<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>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.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>In options,”call option”, the buyer gets the “right to buy” asset from the seller of the contract, if it hits the strike price.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>But, he does not have an obligation. The buyer has to pay a premium to the seller of the contract.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>“put option@,the buyer gets the “right to sell” asset from the seller of the contract,if it hits the strike price.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>But,he does not have obligation. The buyer has to pay premium to the seller of the contract.</p>

[Hassain]

In future contract both the buyers and seller will have obligation

In options only buyer will not have any obligation the seller has to pay the amount yo the buyers whenever the strike price breaches or reduce depends on the option they have taken such as call and put

[Author]

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