Which of the following statements is TRUE?
A) The buyer of a futures contract is said to be long futures.
B) The buyer of a futures contract is said to be long futures
C) The seller of a futures contract is said to be long futures
D) The buyer of a futures contract is said to be short futures.
E) The buyer of a futures contract is unwinding a long position.

Question

Quizplus · Accepted Answer

The buyer of a futures contract is said to be long futures. This means that they have agreed to buy the underlying asset at a specific price in the future. This is different from being short futures, which means selling the futures contract with an obligation to deliver the underlying asset at a specific price and time in the future. Option E is also incorrect as "unwinding a long position" refers to closing out an existing long position in a security or asset, rather than entering into a futures contract.

Which of the Following Statements Is TRUE