The party to a futures contract who is committing to buy the underlying asset as a protection against a possible increasing price of the actual financial instrument or physical commodity holds the long position. Neither party to a futures contract has a choice to exercise or not to exercise the contract; and so neither one complies with the will of the other party. The contract must be fulfilled by the holders on its maturity date by one's selling and one's buying the underlying asset, or by exiting the futures position in another manner. Neither party to a futures contract has a choice to exercise or not to exercise the contract. The contract must be fulfilled by the holders on its maturity date by one's selling and one's buying the underlying asset, or by exiting the futures position in another manner. The party to a futures contract who is committing to sell the underlying asset as a protection against a possible declining price of the actual financial instrument or physical commodity holds the short position.
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