Question

Which of the following statements is correct about closing (exiting) the futures position before maturity?

		You will close at a gain if you were short and the futures price went up between enter and exit
		The clearinghouse will close your position at your first indication even if no other trader can take your place in the market
		If you are long, you will need to short the same contract to exit
		Even if you close prior to maturity, you are still responsible for taking (making) delivery of the underlying asset

Answer 1

Option C is correct. If you are long, you will need to short the same contract to exit.

In derivative market, if you have taken a position then, to exit, you need to take the opposite position. For instance, if you are long, you need to take short position in the same future contract i.e. same strike Price, same maturity, to exit the long position.

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