Futures: execution form matters
A deliverable future transfers the underlying; a cash-settled future uses the specified monetary settlement.[15](#source-market-futures) Check specification, contract size, quotation unit, value of a price move and termination rules. The asset name does not reveal all parameters, and “on shares” does not prove that one share will appear in the account. Products without ordinary fixed expiry require separate study and are not modeled here.
An open futures position requires collateral, while results are reflected through variation margin under clearing rules.[15](#source-market-futures)[16](#source-market-derivatives-clearing) Collateral is neither the purchase price of the whole economic position nor a universal loss limit. Requirements can change and a price move can demand funds before final settlement. Distinguish economic obligation, posted collateral and funds needed to continue.
Educational leverage arithmetic
Suppose a fictional contract is 100 units at 100 roubles each, with 1,000 roubles of collateral. Economic exposure is 10,000 roubles. A fall to 94 gives (94 − 100) × 100 = −600 roubles before costs. A −6% price move equals −60% of the assumed initial collateral. This is not a current margin rule or venue tariff. Loss is calculated on contract size, not capped by the small initial payment.
Check rules for insufficient funds, closing, price gaps and residual obligations. Do not treat closing as guaranteed protection from every debt. Clearing organises performance; it does not insure against price change.[16](#source-market-derivatives-clearing) “Collateralised” does not mean safe.
An option: the right has a price
A call gives a right to buy the underlying; a put gives a right to sell; the exercise price is the strike. The buyer pays a premium, while timing and exercise procedure come from the contract.[11](#source-market-options) Styles and cash or physical settlement differ. Automatic exercise, instruction deadlines and resulting obligations must be checked separately.
For a fictional cash-settled call on 10 units, strike 100, premium 4 per unit and total premium 40, a settlement reference of 112 gives (112 − 100) × 10 = 120; buyer result before costs is 120 − 40 = 80. At 98, payoff is zero and result is −40. Break-even at expiry is 104; it is not the option price before expiry.
Buyer and seller face different risks
For a separately bought and fully paid option, risk on the right is generally limited to the premium, which may be lost in full.[11](#source-market-options) Delivery, borrowing and the resulting position can create additional obligations. A seller’s premium is not a cap on future payment; an uncovered call can have unlimited potential loss. For a simple put on a non-negative-price asset, the calculation limit differs, so “every seller always has infinite risk” is also wrong. Combinations require their own analysis.
A derivative may offset a chosen price risk, but only if underlying, quantity, dates and settlement formula match. A mismatch remains. Variation margin can require liquid funds before operating cash arrives.[15](#source-market-futures)[16](#source-market-derivatives-clearing) “Hedge” therefore does not mean risk-free.