Most detailed answer that helps me understand it better, gets best answer. Thank you.|||With a futures contract, both sides of the contract are agreeing to trade at a specific price at a specific date in the future. Therefore the buyer has to buy at that future price unless he sells his side of the contract to someone else and the seller has to sell at that future price unless he sells his side of the contract to someone else.
An option gives one side the right to a price at a future date, they don't have to use that right and can walk away from the trade. Hence a call option is a contract where the person selling the call has the obligation to sell at the stated price in the future but the person buying the call option and hence the right to that specified price in the future doesn't have to go through with the trade if he doesn't want to.|||Full explanation here: http://www.optiontradingpedia.com/differ鈥?/a>
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment