Loading paragraph...
Image source: Getty Images.
Loading paragraph...
Futures | Options |
|---|---|
Contract holder is required to take ownership of the underlying asset. | Contract holder has the right, but no obligation, to purchase an underlying asset. |
Price of the future purchase determined by current market price. | Price of the future purchase specified in the contract. |
Price can fall below $0. | Price can never fall below $0. |
Less volatile price changes. | Value quickly declines over time and fluctuates more widely with changes in the underlying asset's value. |
Loading paragraph...
Loading paragraph...
Loading paragraph...
Loading paragraph...
About the Author
Adam Levy is a contributing Motley Fool stock market analyst covering technology, consumer, and financial stocks and how policy, economic, and consumer trends shape personal finance, Social Security and retirement savings. Before The Motley Fool, Adam was a financial advisor at Edward Jones. He studied finance and electrical engineering at Carnegie Mellon University.
Adam Levy has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
