Asked by Jared Jacobson on Apr 29, 2024
Verified
With regard to a futures contract, the short position is held by
A) the trader who bought the contract at the largest discount.
B) the trader who has to travel the farthest distance to deliver the commodity.
C) the trader who plans to hold the contract open for the lengthiest time period.
D) the trader who commits to purchasing the commodity on the delivery date.
E) the trader who commits to delivering the commodity on the delivery date.
Futures Contract
Standardized legal agreements to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time in the future.
Short Position
Entering a financial transaction where the investor benefits from a decline in the value of an asset.
Delivery Date
The specific date on which a transaction, particularly in futures contracts, is scheduled to be completed or settled.
- Gain an understanding of futures contracts including the responsibilities of the long and short positions.
Verified Answer
Learning Objectives
- Gain an understanding of futures contracts including the responsibilities of the long and short positions.
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