What are the differences between CFDs and Options?

[Ryan]

 

[Josh]

Hello Ryan,

Trading CFDs and options may look similar. However, there are several disparities among them.
A contract for differences is a consensus an agent popularly known as brokers and traders. These parties exchange capital at a certain time, mostly when the trade is opening and closing.
 In this arrangement, the trader needs not to buy the asset, but he/she can make a profit or a loss; this depends on the asset's market price. 
An option gives its possessors the chance to purchase am underlying asset at an agreed price on a given date in the future. Though the owners have the right to buy the asset, there is no obligation whatsoever to buy or sell it.
CFDs and options are both leveraged tools, and they are also unoriginal. CFDs are usually direct investments in the essential asset. Also, in CFDs, other than the spread and interests, there are no additional costs incurred, which is different in Options. 
The main difference between options and CFDs is that you pay some extra charge, maybe for a call; this depends on how you prospect the market. If the market price favors you, then you will make a profit if otherwise, you make a loss.
In CFDs, you speculate on what the market price will be and depending on that, you can decide to go long (sell) or short (buy).