Difference Between Futures and Option

Understanding types of Crypto Derivative Trading: Futures and Options

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As we know, in crypto derivative trading there are two types of products that are pretty popular on the market today: Futures and Options. Many still think that these two products are the same, but in reality, they have some differences. This difference determines the level of risk of the two products. But before going there, let’s discuss more details about these two products.


Futures are contracts that bind two or more parties to buy and sell crypto at an agreed price and on a specified date. This makes you obliged to buy or sell following the futures contract that you agree to. It means that large amounts of capital are needed following the contract that will be paid later. You can get unlimited profit by using Futures, but you also have an unlimited risk of loss.

In terms of fees that must be paid, futures contracts have a fairly clear and easily understood one usually included with the Commission when making transactions, exchange fees, and brokers. The Future also used the terms long and short which can be said to represent buying and selling.


Options are contracts that give you the right to sell or buy cryptocurrencies at a predetermined price at the beginning. You can do this buying and selling before or when the contract ends. Options are said to have a lower risk compared to futures because on the option you are required to pay a premium at the beginning and the value of your loss will not exceed the value of this premium.

Even so, options still have a high level of risk, because the price of premiums will decrease over time, especially when approaching expire date. The value of premiums going up and down can be caused by many things, such as differences in product prices with strike prices, expired time, and others. This causes the need for the ability to analyze the market direction so that the premium value does not shrink before the profit target is reached.


Future and options alike have a high level of risk and require extensive market analysis. This is why both products are only recommended for more experienced traders. But now there are many alternatives, which can help you get more optimal results and minimize your risks such as algorithm trading.

One provider of algorithms trading that you can try is NOBI. You can choose from all available strategies and start growing your crypto now!

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