You have agreed to deliver the underlying commodity on a futures contract in 90 days. Today the underlying commodity price rises and you get a margin call. You must have

Question

Quizplus · Accepted Answer

If the underlying commodity price rises, it means that the short position (seller) in the futures contract is losing money. Therefore, the exchange will issue a margin call to the short position to ensure that they have enough funds to cover their potential losses. As the scenario mentions that you have agreed to deliver the underlying commodity, it implies that you have a short position in the futures contract. Therefore, the correct choice is B.

You Have Agreed to Deliver the Underlying Commodity on a Futures