Future contract.
Futures contract is an agreement between 2 parties to sell or buy an asset at a certain time in the future at a price decided.
Futures contract bind both the buyer and the seller in an obligation to complete the contract on the fixed date. These contracts can be seen as special types of forward contracts.
Money settlement will happen only at the future but both parties enter into deal on that day.
Both the buyer and seller have to pay some margin to exchange for this contract
Options:
Option contracts gives the right to the buyer but not the obligations.
Call option/put options
Call option buyer gets the right to buy
Put option buyer gets the right to sell
In both case buyer is benefited and still seller signs the contract because he gets premium.
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