What is the cash component of the payoff if a call futures option on 50 units of the underlying asset is exercised?
A) (Current Futures Price - Strike Price) times 50
B) (Strike Price - Current Futures Price) times 50
C) (Most Recent Futures Settlement Price - Strike Price) times 50
D) (Strike Price - Most Recent Futures Settlement Price) times 50

Question

Quizplus · Accepted Answer

When the option is exercised the holder obtains the cash payoff in C and a long futures contract.

What Is the Cash Component of the Payoff If a Call