The seller of a futures contract
A) has the option of canceling the contract the following day if the price is not acceptable to him/her.
B) is legally bound to make delivery of the specified item on the specified day.
C) receives the entire contract amount at the time the contract is made.
D) must make delivery before receiving any monies on the contract.

Question

Quizplus · Accepted Answer

The seller of a futures contract is legally obligated to deliver the specified commodity or financial instrument at the specified price on the specified future date, as per the terms of the contract. This is a binding agreement and does not provide the option to cancel based on price movements or allow for the receipt of the contract amount at the time the contract is made. Payment typically occurs upon delivery, not before.

The Seller of a Futures Contract