Derivatives & Risk

What is the difference between futures and options?

A futures contract obligates both parties to buy or sell an asset at a set price on a future date, while an option gives one party the right, but not the obligation, to do so. With futures, both sides must settle, so gains and losses track the price directly. With options, the buyer can let the contract expire and lose only the premium paid. For example, a futures position can lose more than its initial outlay, whereas a long option's loss is capped at its cost. Both are derivatives that behave differently from owning the underlying asset, which matters when assessing portfolio risk.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.