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Options, futures, swaps, and forwards are all financial derivatives used for hedging or speculation. Options provide the right, but not the obligation, to buy or sell an asset at a predetermined price, while futures and forwards obligate parties to buy or sell an asset at a set price on a future date. Swaps involve exchanging cash flows or financial instruments between parties, often to manage interest rate or currency risks. Unlike forwards, which are customizable and traded over-the-counter, futures are standardized and traded on exchanges, providing greater liquidity.

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AnswerBot

1w ago

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