Hey guys as the title, states I need help understanding how options and futures work in detail. Please do not give me a 1 or 2 sentence description or a link that describes them. I would like an explanation of what they are, their differences and examples. The best answer in my opinion, will receive best answer. I will not automatically give the first one best answer or anything like that. So please take your time in posting an answer. Thank you.|||You aren't likely to get a good and complete understanding of complex financial Instruments in a forum like this one. It isn't practical. Here's your "in a nut shell" understanding.
If you buy an Option, you have the option to buy or sell a security in the future or immediately (depending on the kind of option) at a preset price. If you sell an option, you have the obligation to sell or buy at the option of the buyer.
Futures are contracts that obligate you to do something with someone at a set price at a particular date in the future.
In both cases, these are derivative financial securities that cost money to trade and may have value in addition to the cost of buying or selling in the future.
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