What is the reason an investor might choose futures, which limit both gains and losses, over options, which limit only losses?
A)Options are cheaper than futures.
B)Futures are cheaper than options.
C)Futures are more volatile than options.
D)Futures are far more numerous than options.

Question

Quizplus · Accepted Answer

Futures contracts typically have lower upfront costs compared to options because they do not involve paying a premium upfront. Options buyers pay a premium for the right, but not the obligation, to execute the contract, which can make options more expensive initially than entering into a futures contract.

What Is the Reason an Investor Might Choose Futures, Which