Options contracts contrast with 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)None of these options

Question

Quizplus · Accepted Answer

Options contracts differ from futures contracts in that they do not create an obligation for the owner of the instrument. With an options contract, the buyer has the right, but not the obligation, to buy or sell the underlying asset at a specified price and time. On the other hand, a futures contract is a binding agreement to buy or sell an asset at a predetermined price and time. Options can be traded on organized exchanges, just like futures contracts, and options are indeed derivatives.

Options Contracts Contrast with Futures Contracts Because