Third Assignment

Futures options can be a low-risk way to approach the futures markets.Buying options allow one to take a long or short position and speculate on if the price of a futures contract will go higher or lower. There are two main types of options: calls and puts.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. Option ontracts give the right to the buyer but not the obligation. As a buyer, you may choose to let the option to buy call or put option lapse. Seller has the obligation to comply with the contract.