Can options replace futures?

[thecoder]

Options are unilateral contracts where only one side is required to perform, other than the receiver of rights paying a premium, of course.

Futures contracts are bilateral contracts that require both sides to perform. One side must deliver a specified quantity, quality(If applicable), delivery location(If applicable), and with other obligations that deal with both mundane and exceptional situations. The other side needs to accept the delivery as per the various contract terms and make payment.

An option writer (seller), of a call option is obligated to sell the underlying asset at a predetermined price if that call option is exercised by the long. This is known as the call writer being assigned. The writer of a call option is paid to take on the risk that is associated with being obligated to deliver ...
(--> https://www.investopedia.com/ask/an...-between-right-and-obligation-call-option.asp )

Meaning: option buyer has no obligation to finally take the underlying,
but the option writer (seller) has the obligation to deliver if the option buyer wishes so.
So, IMO the net result for the writer is the same in both option and future case, even more flexible in the option case.
And the margin requirements, though different, are IMO similar.

 

[SanMiguel]

An option writer (seller), of a call option is obligated to sell the underlying asset at a predetermined price if that call option is exercised by the long. This is known as the call writer being assigned. The writer of a call option is paid to take on the risk that is associated with being obligated to deliver ...
(--> https://www.investopedia.com/ask/an...-between-right-and-obligation-call-option.asp )

Meaning: option buyer has no obligation to finally take the underlying,
but the option writer (seller) has the obligation to deliver if the option buyer wishes so.
So, IMO the net result for the writer is the same in both option and future case, even more flexible in the option case.
And the margin requirements, though different, are IMO similar.

In November I want to sell you something and you want to buy it from me at a specified price.
I think the market is going down so I want to fix the price now and avoid the risk of a loss.
I do not want to give you an option where you can get out of the trade even though I get a little premium for it.

 

[stepan7]

I know options very well, but not that much futures, just started studying futures.
But I already have the suspicion that futures are IMO useless products ,
and can very well be replaced by normal options. Isn't it?

You better off to read this book (hardcover edition)