Futures and options are both derivative investment instruments, which have a complicated structure and operation and involve leverages. As high-risk, they are not suitable for investors who are inexperienced or have low risk tolerance.

Futures
Simply put, futures are a financial contract where the buyer and the seller promise to buy or sell a relevant asset at a pre-agreed price on a designated date in the future. The asset can be an equity, a market index, a currency, or a commodity.

You can buy and sell futures contracts of different relevant assets at the Hong Kong Exchanges and Clearing Limited (HKEX). You only need to pay a part of the total value of a contract, as the margin, to buy or sell the futures contract. This leverage can amplify your return and loss. When the price trend of the relevant asset is opposite to your expectation, you might face a risk of being required by the broker to pay a margin (i.e. margin call) due to an increase in the margin. The loss might exceed the margin you pay.

Options
Options are a financial contract that grants a right to the buyer, which allows the buyer to buy or sell a relevant asset of the options contract that can be an equity, a market index, a currency, or a commodity at an established price in a certain period of time.

You can buy and sell options contracts of different relevant assets at the HKEX. The buyer and seller of an options contract face different risks and returns. Simply put, if you are the buyer of an options contract, you must pay an option premium to the seller. The maximum loss is limited to the option premium. If you are the seller, when collecting the option premium, you must pay a margin as a guarantee of buying or selling the asset. The same as a futures contract, the seller of an options contract faces the risk of margin call. Its loss might far exceed the option premium collected.