Options are more useful than forwards and futures because options:

Question

Quizplus · Accepted Answer

Options give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time. This means that if the price of the underlying asset moves against the buyer, they can elect not to go through with the transaction and only lose the cost of buying the option. This feature is not available with forwards and futures, where both parties are obligated to complete the transaction regardless of market movements. Therefore, options provide more flexibility and are often considered more useful than forwards and futures.

Options Are More Useful Than Forwards and Futures Because Options