Which of the following are advantages of using options for futures speculation?
I. increased leverage
II. Potential losses are limited to the cost of the option.
III. Options are available on a broad range of commodity, index, and currency futures.
IV. Investors must always take delivery of the commodity.
A) I and II only
B) II and III only
C) I, II and IV only
D) I, II, and III only

Question

Quizplus · Accepted Answer

Options for futures speculation offer increased leverage (I), limit potential losses to the cost of the option itself (II), and are available on a wide variety of underlying assets, including commodities, indexes, and currencies (III). Investors are not required to take delivery of the commodity, which makes statement IV incorrect.

Which of the Following Are Advantages of Using Options for Futures