In the futures markets,the buyer of a financial futures contract:

Question

Quizplus · Accepted Answer

The buyer of a financial futures contract has the obligation to receive the underlying financial asset at the specified future date. This is because the buyer is going long on the contract and is expecting the price of the underlying asset to increase, hence wanting to buy it at a pre-determined price in the future. The seller, on the other hand, takes the short position and has the obligation to deliver the underlying asset at the specified future date. Option A is incorrect because the buyer is not taking the short position. Option B is incorrect because it is the seller who has the obligation to deliver the underlying asset. Option D is partly correct, as both the buyer and seller have to record the contract with the clearing house.

In the Futures Markets,the Buyer of a Financial Futures Contract