Futures vs Options, Which are Best to Trade? ✅

A futures contract is a contract to buy or sell an underlying asset at some point in the future. You agree on the asset to buy, price and date when to exercise the contract.

An options contract is a contract giving you the right to buy or sell an underlying asset at some point in the future at a certain pre-determined price. The difference from a futures contract is that there is no obligation to buy the asset on expiry. As the price moves up or down the options contract price fluctuates up or down.

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[NOVAsteamed]

Did I understand well? Options = specific date specific price but you are not obligated to buy. The premium is higher because of that. Futures = specific date specific price, but obligated to buy. The premium is lower because of that.

[brandons]

great explanation after many searches 👍

[chevon]

Why would anyone bother to trade futures over options, I don’t get it.

[RidingwithDylan]

I understood everything 1/2 through! Thank you

[AlexHallsYT]

Thanks - seems like an option from a buyers perspective is always going to be better than a futures contract no? As there's no obligation?

[xin]

A good explanation of a futures contract and an option BUT the question as to which is better was not answered

[romanterry]

My question is what site has zero commissions going in and out and real time means real time? I ask as I am using the one minute charts and when I sell I'm more interested in making small monies but with perfect consistency. The only way to do that is when it has gone low you need to cash out when it goes back up but it might only go up for 20 seconds and if you close the trade and it takes another 30 seconds to close you could seriously lose all your money. This is a huge point as it assures success. Anything less falls into the category of gambling.

[aaronbriggs]

The options bit made no sense. Why buy rights to a contract for £1 when you can simply wait until it hits 160 & buy futures market order then? With the option if the price never hits 160 you lose. Just wait and buy future or place a limit order ?

[richardhanes]

so futures dont have calls or puts, its just one type?

[brenton]

Not going to lie, now that I understand what they are (thank you very much, you explained it superbly) I know I can not trade in them as I think it is as ridiculous as NFT's.

[romanterry]

Please if anybody knows the answer let me know here. It's such a huge factor that if the second you hit close and it was in realtime the chance of losing money is nearly zero as you would not close it out if it were not in your favor. You would let it hit a stop loss or wait to go back up till it this right? I'm new at this so please treat me like a 5 year old so I get the basics down right. Something seems too easy with this at least using simulated money. I almost never lose as it closes out the second I hit close. In real life is this true?

[OurOregonlife]

Not sure I understand quite? Seems options would be a safer way less risky. But With futures you could pay pennies. Downside is you could pay allot more if I am understanding. If so how is the process protected by the capital?

[margarettasanjay]

Nice video, I invest heavily in options too and it has proven more than a passive income source and I am up $ 3k for the month in profits

[shanephillips]

I have question about Option Selling. Hope someone can answer.

If I "Sell to Open" a Put or a Call, do I HAVE to "Buy to Close" to complete the transaction? Assuming that the stock did not move against me, what if I collect the premium from the option sale and decide to do nothing?

[cagricelik]

thought he put a spell in the beginning

[LGBBQ_XMax_Pro]

Sometimes someone can explain sum as good as it can be and I'll still understand nothing bruh this is annoying sometimes

[alexlaverty]

Is there a limit to how much you can buy at that price ?

[jakkulapraveen]

what is off setting the position in futures. how does it works.

[MartinSage]

Look at the Statistics (facts) from the World Championship of the Top 5 traders in Forex vs Futures. Forex=range is 40% to 100%
Futures=range is 100% to 1, 100%
Anyway I am in USA and you are in the UK