There will always be a futures contract in a particular commodity while there's a demand from hedgers and speculators. When interest and trading dries up in a contract, it may be de-listed from the exchange and replaced with a more popular trading tool. While holding a futures contract obliges the holder to buy or sell at some point in the future, options are opportunities to buy and sell if the market is moving in the right direction. If the price of the underlying investment moves in the direction the investor hopes, exercising the option can mean a good profit. On any exchange where options are traded, the strike price is the term for the price an investor will pay out or receive if the option is exercised, as laid down by the exchange.
Investors buy call options if they think the price of the underlying investment is going up.
People who buy put options are betting the price will fall. With either type, the potential loss to the investor is only the premium , or dollar amount, used to buy the option. The main difference between buying and selling options is in terms of commitment, since buyers really have no obligation to do anything at all and simply let the option expire. Sellers, though, have an obligation to complete a trade if the party to whom they sold the option want to exercise it. The most basic form of option trading is writing covered stock calls .