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In derivatives option or future is good for trade?
In derivatives option or future is good for trade?
2 Answers
- Rolf GolfLv 58 years agoFavorite Answer
Both are good in their own rights and there are some assets that only offers futures but not options so you sometimes don't have a choice at all.
Futures is relatively higher risk than options due to its daily settlement and unlimited loss characteristic, which makes going into margin calls very common. Options is relatively lower risk as buying them exposes you only to limited risk, no margin calls, but unlimited profit potential.
Learn the difference between futures and options in the link below:
- vikasbargaleLv 58 years ago
As per Warren Buffett and Peter Lynch, derivatives are the weapons of financial mass destruction.
They are not for small retail investors.
SIMPLY AVOID.
Source(s): Personal Experience.
