What is the difference between options and futures?

I'm kind of unclear about that. Options supposedly give you the right to buy an asset at a set price, while an owner of a future's contract is obligated to buy or sell. So basically if you have an option it does not seem that you have to buy. So if you don't have to buy or sell, then why is it that 80% of all option traders lose money?|||Most option contracts written are what are called out of the money options. That is the price of the security is say $30. The option is written to buy at $32, for 3 months. If the price does not rise to $32 plus the price of the option then it looses money. Even if it is written in the money it is written at a healthy premium, so it still may loose money.|||One guarantees you will lose money eventually, and the other eventually guarantees you will lose money, I forget which is which...





Futures %26amp; Options trading (unlike investing) is just GAMBLING.... more information is legally available about horses, so if you want to gamble, bet on a horse race! Your odds are better...|||Hi, here is a collection of informative articles about investing. a free online investing tutorial for you.





http://www.investingtutorial.info/





good luck !





wish you make fortune from investing !|||That's not quite accurate. A futures contract may require you to purchase or take delivery of the underlying asset (such as a bunch of barrels of oil or bushels of wheat). Options, when purchased, give the buyer the right to buy or sell the underlying at the strike price, but when sold short, they obligate the seller to buy/sell the underlying at the strike price.





I'm not sure where the 80% of all options traders figure comes from, but I'd assume it comes more from how often novice traders try to trade options without understanding how they work. There are a lot of different factors that affect an option's value, including the movement of the underlying asset, time remaining, implied volatility, and other factors. One of the most common mistakes in my understanding has to do with how options are "wasting assets," that is, they eventually expire and lose a bit of their value with each passing day. Many novice traders buy short-term options with too little time left to expiration and hope their cheaply-priced option will explode in value as their underlying asset goes up a zillion points, yet they instead lose because their option was so close to expiration that all the time value leaked out of it, leaving them with with worthless options after they'd paid money to get into the position.





Frankly, I'd imagine that statistically, 90%+ of all option traders lose money. Option trading isn't simple, and many novice traders don't want to take the time or effort to understand how they work.





For the record, futures trading is arguably even riskier, since futures contracts often see explosive volatility, and because futures are commonly traded as leveraged instruments, it's often possible to lose more money in a futures trade than one puts into it initially as the underlying asset (oil, wheat, bonds, whatever) continues to move against the trader.





If you're interested in trading either, I would strongly, strongly suggest you get a good education. There are a handful of reputable outfits out there that teach this stuff and many scam operations out there, unfortunately. You can also get some good information reading books from MacMillan (Options as a Strategic Investment) and Teweles/Jones (The Futures Game: Who Wins, Who Loses, and Why).