There is a mutual agreement known as the option contract which gives the price for buying and selling the underlying asset. The option contract also gives the expiry date when the contract will be no longer valid. Options can be exercised in the American and European styles. With the American style the option can be exercised before the expiry of the contract whereas the in European style the options can be exercised during the date of expiry.
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Futures refers to a standardized and tradable contract which requires settlement at specified prices and on specified dates. Futures is more risky than options as it has an obligation to buy. Commodities can also be used like gold and crude oil to settle the transaction.

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