A forward contract involves the actual purchase or sale of a specified quantity of a commodity, government security, foreign currency, or other financial instrument at a price agreed upon now, with delivery and settlement at a future specified date.
An option is a financial instrument that gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price before or at the expiration date.
A trading limit, also known as a fluctuation limit, is the maximum amount that the price of a commodity future, option, or listed security may fluctuate during a trading session.
