Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Investment
The main fundamental difference between options and futures are contractual obligations. An option gives the buyer the right, but not the obligation to buy or sell an asset at a specific price at any time during the life of the contract. A futures contract, on the other hand, gives the buyer the obligation to purchase a specific asset, and the seller to sell and deliver that asset at a specific future date, unless the holder's position is closed prior to expiration. An investor can enter into a futures contract with no upfront cost other than commissions.
Buying an options position does require the payment of a premium for the privilege of not being obligated to buy the underlying asset in the event of an adverse shift in price.
Futures contracts typically represent a larger investment in the underlying asset. (from the legal obligation to buy or sell at a given price, and the actual money laid out that is larger than for options). The contract requires the buyer to either purchase the goods by the deadline or sell the contract to another party. So, the financial obligation of futures is potentially very large. Thus, the risk in futures is larger than for options where the premium represents the maximum amount that a purchaser of an option can lose. The gain on an option can be realized by exercising the option when it is in the money (For a call option, when the option's strike price is below the market price of the underlying asset. And for a put option, when the strike price is above the market price of the underlying asset), going to the market and taking the opposite position, or waiting until expiration and collecting the difference between the asset price and the strike price. In contrast, gains are attributed to the futures accounts of the parties at the end of every trading day.
Bibliography
Options and futures. http://www.discountcommoditybrokeronline.com/articles/Options-and-Futures.html
What is the difference between options and futures? Investopedia. http://www.investopedia.com/ask/answers/05/060505.asp
Investments are the assets or items purchased with the anticipation to generate the income in the future. In the economic sense, investments refer to the goods and services purchased and not consumed today for the purpose of generating wealth in the future. Similarly, going to a university or building a factory to produce goods and services are the examples of investments. Within a financial environment, investors purchase assets with the
Logistics difference goals military business logistics term management, operations, design administration. Military and Business Logistics The difference between the goals of military and business logistics in terms of management, operations, design and administration The planning, conceptualization and administration of military and business logistics are similar in many respects but there are marked difference in terms of their aims, orientations and objectives. Many management centered business processes and logistical methods have in fact been
investment in the mutual fund industry and how fast it's growing. This growth was especially rapid during the 1990s. 401(k) plans have helped out with this growth, and contributed to the large number of mutual funds. Because of the proposed changes to Social Security, and also helped in some way by the Internet, nearly half of all households in the United States own some form of stock. Those who
" This is significant because it shows how some critics of contrarian investing will often point to the various instances of speculation and assume that it is contrarian investing. In some cases the psychology of consumers can become so extreme, that the definition of what is speculative expands greatly. As a result, using contrarian investing in conjunction with other indicators / tools can help prudent investors and traders, be able to
company's investment success especially in relation to other companies. The paper aims at establishing how a company's competitiveness can be calculated in relation to others in the same industry and the factors that hinder the calculations or hinder a true picture of the same Compare industry average and a main competitor For convenient comparison of industry average, majority of companies place Industry average values next to a company's financial measures for
Money can help bring about the truly necessary elements, however, and without proper funding the ability to give a good public education to eth hundreds or thousands of students most serve becomes a true practical impossibility. There are numerous elements of providing an education that require an investment of financial resources, and like most things in this world you get what you pay for when it comes to education.