Question

There are two parties to a futures contract. One party in this contract who has a...

There are two parties to a futures contract. One party in this contract who has a long position in the contract, is doing which of the following:

Group of answer choices

This person gives a commitment to sell a certain commodity at a certain price at a future date.

This person has an option to buy a certain commodity at a certain price in future

This person has a very long time horizon and plans to hold the contract open for the lengthiest time period.

This person has an option to sell a certain commodity at a certain price in future

This person gives a commitment to buy a certain commodity at a certain price at a future date.

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Answer #1

Question

There are two parties to a futures contract. One party in this contract who has a long position in the contract, is doing which of the following:

Answer :

This person gives a commitment to sell a certain commodity at a certain price at a future date.

In a futures contract the party with long position has commitment to buy commodity at decided price and date the other party is with short position with commitment to sell commodity to party with long position.

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