Writing options carries unlimited loss, is it the same for futures?

General
2

Yes but the rate at which you will make losses depends on which option you have written. 

If you have written deep in the money option the losses will mimic that of a futures.

If its ATM option the rate of loss will roughly be half of futures. Meaning you lose Rs.1000/- on futures you are likely to lose Rs.500/- on the options.

If its OTM or deep OTM option the rate at which you will make a loss will be quite low. 

The reason for this behavior is because of the Option delta.

Deep ITM option has a delta of 1.0

ATM Option has a delta of 0.5

OTM option has a delta of close to 0. 

2 Likes
3

futures move with underlying mostly… so if unhedged…they have almost the same risk as of trading in equity

4

Futures has higher risk and return than Equities (in Delivery segment) due to the leverage provided.

For Options, Karthik has provided a good answer.