If you took a long position in a pork bellies futures contract and then forgot about it, what would happen at the expiration of the contract?
A) Nothing-the seller understands that these things happen.
B) You would wake up to find the pork bellies on your front lawn.
C) Your broker would send you a nasty letter.
D) You would be notified that you owe the holder of the short position a certain amount of cash.
E) You would be notified that you have to pay a penalty in addition to the regular cost of the pork bellies.

Question

Quizplus · Accepted Answer

At the expiration of a futures contract, if you hold a long position, you are obligated to take delivery of the underlying asset or settle the contract in cash, depending on the contract terms. In this case, you would owe the holder of the short position a certain amount of cash if the contract is cash-settled.

If You Took a Long Position in a Pork Bellies