When an investor takes a position in the market by buying a futures contract, the investor is said to be in a:
A) Long position.
B) Short position.
C) Short futures.
D) Hedge position.
E) None of the above.

Question

Quizplus · Accepted Answer

When an investor buys a futures contract, they are taking a long position, meaning they are committing to purchase the underlying asset at a future date for a price agreed upon when the contract is initiated. This contrasts with a short position, where the investor would be selling a futures contract with the expectation that the price of the underlying asset will decrease.

When an Investor Takes a Position in the Market by Buying