First, let's start this article with the definition of futures and options and find out what is the main difference between both. The reason for the futures market to be established in the past was related to farmers and commodities. While original futures and options contracts were established with the purpose of real physical delivery when the contract elapsed, this is often not the case nowadays. When it comes to trading derivatives, emini trading is definitely among the most popular trading strategies because of many advantages it carries. Future is a contract in which two parties agree to exchange physical commodity or a set of financial instruments on an exact future date at a particular price.


That is why futures options trading is not only in domain of producers and consumers, but also speculators play a great role in this market.
Both instruments can be very useful for a wide range of people, but first you have to learn basics about these instruments, how both markets work, what characteristics these instruments have, which strategies you can use to trade them and more. Options on the other side give the buyer the right to buy or sell the underlying asset at a particular price on or before determined future date.
To balance the market, central marketplaces were established where farmers could sell their commodities for immediate delivery (spot contract) or forward delivery (forward or future contract). Both futures options trading is understood as derivative trading, since the price of both instruments derives its value from its underlying asset, which is most of the time a commodity in case of futures, and stock or index in case of options.


Today you can trade futures not only on agricultural commodities, but also financial instruments like bonds, currencies and securities. If for example car sellers just went out with big selloff of their new models (same car, new model) with very attractive prices and paying possibilities and you suddenly can get a new car, new model for the same price as you can get the old car, old model from your neighbor, you will probably step away from the contract with your neighbor and not exercise the option you had. Because of this fact the prices of old cares of the same model has grown significantly on the market and you will be more than happy to exercise the option you have to buy this car for 'only' $20,000, while the normal price is currently around $25,000.



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