How option contract differ from future contract?

[Leena Nathan]

Fundamental difference between option and futures lies in the obligation they put on their buyers and sellers,An option gives the buyer / seller the right to buy / sell a certain asset at a specified price during the period of the contract.A futures contract gives the buyers / sellers the right to buy / sell  and deliver the asset at a specified future date .

[murugan]

Option contract deals with the premium amount whereas future contracts deals with margin money .

 

[shivkant]

-in future contract buyer and seller will not only have rights but obligations as well but in option buyer will not have any obligation to fulfill

-in option buyer must pay some premium to seller for taking risk but this provision is named as margin which is paid by both buyer and seller

[Hariesh]

In future contract both buyer and seller has rights to buy and sell

In option contract buyer has only rights and no obligations and the seller has only obligation but no rights to execute

[Kannan]

In future contract there is right to sell or buy with obligation.  In the options market there is only right with no obligation in the case of buyers.  In case of sellers in options contract there is obligation.

The margin required will be small in options contract.

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