Options and futures are both financial products that investors use to make money or to hedge current investments. Both are agreements to buy an investment at a specific price by a specific date.
An option gives an investor the right, but not the obligation, to buy (or sell) shares at a specific price at any time, as long as the contract is in effect.
A futures contract requires a buyer to purchase shares, and a seller to sell them, on a specific future date unless the holder’s position is closed before the expiration date.
The options and futures markets are very different, however, in how they work and how risky they are to the investor.