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 happen today while futures are only in the future.

Question

Quizplus · Accepted Answer

Options contracts give the owner the right, but not the obligation, to buy or sell the underlying asset at a specified price and time. Futures contracts, on the other hand, create an obligation for both parties to fulfill the terms of the contract on a specific future date. Options contracts can be traded on organized exchanges, just like futures contracts. Additionally, options contracts are a type of derivative, meaning their value is derived from an underlying asset. Finally, both options and futures can involve exchanges happening today or in the future.

Options Contracts Are Different Than Futures Contracts Because