im sure this question has been asked before, but what is the difference between a future and an option. and what catagory does shorting (the investing strategy) fall under?
2007-10-21 08:49:09 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
The primary difference between options and futures is that options give the holder the right to buy or sell the underlying asset at (or, if the option is American-style, before) expiration, while the holder of a futures contract is obligated to fulfill the terms of his/her contract.
Shorting is selling something that you do not own. You can short stock, options or futures.
2007-10-21 09:35:26 · answer #1 · answered by zman492 7 · 0⤊ 0⤋
Think about an 'option' as an option to do something. If you buy a December (call) option to buy the S&P 500 at 1600 then you have the option to do so between now and the expiration if its to your advantage. If the S&P is trading at 1800 you would definately want to buy it 200 points lower so you would. If the market is at 1400 your option would be to not purchase it for 1600. There are two kinds of options 1) a CALL is the right (but not the obligation) to BUY at a specific price. 2) a PUT is the option to SELL at a specific price.
2007-10-22 12:43:03 · answer #2 · answered by stagecoachtrader 1 · 0⤊ 0⤋
Any Short Term Capital Loss can be set off against any Short Term Capital Gain or Long Term Capital Gain and if there is no sufficient profits to absorb that loss , such unabsorbed loss can be carried forward for next 8 Assessment years. But only if the return is filed within due date otherwise it cannot be carried forward.
2016-05-24 01:09:53 · answer #3 · answered by ? 3 · 0⤊ 0⤋
futures are commonly used for commodities(i.e. oil, corn, wheat) and options are mainly used for equities. and far as shorting not sure what you are looking for in category but it is aggressive high risk if that is what you are asking
2007-10-21 09:03:22 · answer #4 · answered by nick w 2 · 0⤊ 0⤋