Options Trading
Options Trading
Options Trading
Both futures and options are types of derivatives and can be traded freely on OKEx. However, new traders should understand what options trading is and how it differs from futures trading before they enter the markets. The major difference between options trading and futures trading is that the former contracts are "optional" while the latter are "obligatory."
For instance, when you buy a Bitcoin options contract on OKEx, you pay a premium to be able to buy or sell Bitcoin at a certain price on a certain date. If the price on that date is not favorable for you, you don't have to take any actions and the option will simply lapse or expire. In the case of a futures contract, however, you will have to complete the transaction and buy or sell the underlying at the settlement date.
This major difference is that options allow for market speculation while futures are predominantly used for risk management. Options trading is also relatively low risk compared to futures, since the maximum risk for an options contract buyer is the premium they paid for it, whereas the risk in a futures contract has no such limit.