Futures and options are financial derivatives that allow traders to speculate on the future price movements of underlying assets such as stocks, commodities, currencies, and indexes.
A futures contract is an agreement to buy or sell an underlying asset at a predetermined price on a future date. Futures are typically used for hedging or speculating on price movements.
An option is a contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specified date. Options are typically used for hedging or speculating on price movements, and provide the holder with more flexibility than a futures contract.