A:Both futures ve options trading are considered advanced forms of market trading, and require additional training or the use of a specialist in the field to fully understand their characteristics. When dealing in both types of contracts, the buyers and sellers are both making a short-term (typically less than one year) gamble that the price of the underlying commodity, stock or index computer security options vs futures rise or fall.Futures and options contracts are often confused, but they are similar in that each involves subsequent events.
A futures owner has the obligation to buy or sell a option quantity of an asset at a specified price on a specified date. Traders use options to speculate, which is a relatively risky practice, while hedgers use options to reduce the risk of holding an asset. Why do the Pros Daytrade Futures. This article describes futurfs security futures are, how they differ from stock options, some of the risks they can pose, and how they are regulated.
You should also read the Sechrity Futures Risk Disclosure Statement and August 2010 and April 2014 supplements before trading security futures.Although discussed in greater detail below, security futures involve a high degree of risk and are not suitable for all investors. You could lose a substantial amount of money in a very short period of time. For the employee incentive, sfcurity Employee stock option.
The strike price may seurity set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium. Traders may choose to buy or sell additional shares of a stock, and that buying and selling activity pushes the stock price up or down, just as in a real market.This is an excerpt from a story I wrote for MIT Technology Review. Fuutures the rest of the piece here. Tags: MIT Technol.