Futures & Options

A futures contract creates obligations for a specified quantity, expiry and settlement method. Margin supports that obligation without paying the contract’s full value; adverse price changes can require additional funds to maintain an open position. An option gives its buyer a defined right; its writer accepts corresponding obligations. Strike, premium, contract multiplier and expiry determine the payoff. A long call’s expiry payoff is max(underlying price − strike, 0), before premium and costs. Iranian contract specifications govern exercise, margin and settlement; overseas educational examples establish mechanics, not local permissions or identical rules.

Worked example (hypothetical)

A call has strike 1,000, premium 80 and multiplier 100. At expiry price 1,150, gross payoff is 15,000 and premium paid 8,000, leaving 7,000 before fees. At 950 the buyer loses the 8,000 premium. A futures position can require additional margin beyond its initial deposit.

Check your understanding

Is an option’s premium the same as its strike? No. Premium buys the right; strike is the contractual exercise price.

Sources, reviewed 5 October 2026

• Fundamentals of Options on Futures
• Explaining Call Options
• Position and Risk Management