Asked by Eunice Gwendolyn on Jul 12, 2024
Verified
A trader who has a __________ position in gold futures wants the price of gold to __________ in the future.
A) long; decrease
B) short; decrease
C) short; stay the same
D) short; increase
E) long; stay the same
Gold Futures
Standardized contracts to buy or sell gold at a specified future date and price, used by investors for hedging and speculative purposes.
Long Position
An investment strategy where an investor buys securities with the expectation that they will rise in value over time.
- Discern between adopting long versus short positions in the realm of futures trading and realize their implications.
Verified Answer
DD
Dreeana DavisJul 14, 2024
Final Answer :
B
Explanation :
A trader with a short position benefits when the price decreases, as they can buy back the asset at a lower price than they sold it for, making a profit from the difference.
Learning Objectives
- Discern between adopting long versus short positions in the realm of futures trading and realize their implications.
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