Futures contract prices are established
A) through an auction process in the "pit" on the exchange floor.
B) through brokers.
C) through an over-the-counter network of futures dealers.
D) through specialists on the stock and bond exchanges.

Question

Quizplus · Accepted Answer

Futures contract prices are typically established through an auction process in the "pit" or trading floor of the exchange. Traders and brokers bid and offer prices for these contracts, which are recorded by the exchange and used to determine the prevailing market price. Over-the-counter trading by futures dealers and specialists on other exchanges may also play a role in determining prices, but the primary market for futures contracts is typically the exchange floor.

Futures Contract Prices Are Established