Futures and options are types of investments. Futures are transferable contracts that are standardized and are exchange traded. These require a delivery of a commodity, currency, stock index, a specific price or a bond. Options are similar except for the difference that futures do convey an obligation to buy. With futures trading, there is a substantial amount of risk involved. This is due to the payoff pattern being symmetrical. The risks are high for both sellers and buyers in this way. It is important to note that futures contracts are forward contracts, which simply means they represent a pledge that a specific transaction will occur sometime in the future.