Options contracts are different than futures contracts because
A) options are not traded on organized exchanges.
B) options do not create an obligation for the owner of the instrument.
C) options are derivatives.
D) options allow exchanges to happen today while futures are only in the future.

Question

Quizplus · Accepted Answer

The key difference between options contracts and futures contracts is that options do not create an obligation for the owner of the instrument, whereas futures contracts do. Options contracts give the owner the right, but not the obligation, to buy or sell an underlying asset at a set price within a specified time frame. Futures contracts, on the other hand, require the buyer to purchase the underlying asset at a predetermined price and time in the future. Therefore, choice B is the correct answer.

Options Contracts Are Different Than Futures Contracts Because