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Options contract
An options contract gives its buyer the right, but not the obligation, to buy or sell an asset at a fixed price, the strike price, on or before a set date. The buyer pays the seller an upfront fee, the premium; the seller must perform if the buyer exercises.
What it means for you. Buying an option risks the whole premium: if it expires out of the money, it is worth nothing. Selling, or writing, an option collects the premium but can expose you to large or even unlimited losses. Prices can swing hard near expiry, and an option's value depends on time left and volatility, not just the asset's price.
Sources: SEC Investor Bulletin: An Introduction to Options, CFTC Glossary, SEC Investor Bulletin: Understanding Margin Accounts · checked 4 October 2026
Futures contract
A futures contract is an agreement to buy or sell an asset on a set future date at a price fixed today. Both sides are obligated, and most traders close the contract before that date rather than deliver, so it is mainly used to bet on or hedge against price moves.
What it means for you. Futures are traded on margin, so a small deposit controls a much larger position, and gains and losses are settled to your account every day. A move against you can bring a margin call or a forced close well before expiry. Some futures settle in cash rather than the asset, so you never receive the coin.
Source: CFTC Glossary · checked 4 October 2026