If the price of a futures contract increases, then
A)the exchange will collect the amount of the increase from the seller of the contract and transfer it to the account of the buyer of the contract.
B)the exchange will collect the amount of the increase from the buyer of the contract and transfer it to the account of the seller of the contract.
C)the exchange will collect the amount of the increase from both the buyer and the seller and place it in escrow until the delivery date.
D)the additional funds will be required from either the buyer or the seller until the delivery date.

Question

Quizplus · Accepted Answer

When the price of a futures contract increases, the exchange collects the amount of the increase from the seller and transfers it to the buyer's account. This process is part of the daily settlement and ensures that the gains and losses from price movements are reflected in the participants' accounts.

If the Price of a Futures Contract Increases, Then