By selling short a futures contract of $100,000 at a price of 115, you are agreeing to deliver ________.
A) $100,000 face value securities for $115,000
B) $115,000 face value securities for $110,000
C) $100,000 face value securities for $100,000
D) $115,000 face value securities for $115,000

Question

Quizplus · Accepted Answer

When you sell short a futures contract, you agree to deliver the underlying asset at the contract price, not the face value. In this case, selling short a futures contract of $100,000 at a price of 115 means you are agreeing to deliver $100,000 face value securities for $115,000 (100,000 * 1.15).

By Selling Short a Futures Contract of $100,000 at a Price