Which of the following provides the profit to a long position at contract maturity?
A) Original futures price - Spot price at maturity
B) Spot price at maturity - Original futures price
C) Zero
D) Basis

Question

Quizplus · Accepted Answer

The profit to a long position at contract maturity is the difference between the spot price at maturity and the original futures price. This is because the long position was taken to benefit from an expected price increase, and if the spot price does indeed increase, the long position gains the difference between the starting futures price and the higher spot price at maturity. The formula for profit to a long position is:

Profit = Spot price at maturity - Original futures price

Which of the Following Provides the Profit to a Long