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Future contract – buyer / seller have the right to buy or sell the product and have to settle the terms of the contract on or before the decided date.
Option contract – the buyer has the right but is not obligated to buy on or before the decided date. But the seller has to comply if the buyer exercises the terms.
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>in future contract both buyers and sellers has the rights to buy and sell the shares but 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 buyer has the rights to buy the shares but with no obligations.</p>in option contract buyer have right to buy but not obligations while in future buyers and seller hav right to buy and obligation is also.
Future Contract – This offers the buyers and seller both right to buy & sell respectively & they are under obligation in case any party wants to execute the trade. The settlement is done on day-to-day basis for profit/loss. Either party can exit anytime and sell their contract to another party. Both parties pay a deposit price to the exchange.
Option Contract – This provides buyer of the contract the right to buy/sell at a defined price (strike price) and he/she is under no obligation to execute the order at the expiry date. Whereas the seller of the contract is under obligation to sell if the buyer wants to execute the order. But seller gets premium here whereas buyer has to bear the premium but will keep the profit from the price movement.
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