BU283 Chapter Notes - Chapter 19: Spot Contract, Forward Price, Forward Contract
Document Summary
The futures price is the price for delivery on the settlement date; the spot price is the price for delivery. Chapter 19 futures and options immediately: true. The difference between hedgers and speculators is that hedgers usually sell futures contracts and speculators usually buy futures: false. Futures traders do not need to worry about their trading counterparty defaulting on their obligations because of the clearinghouse: true. If you are long 1 futures contract, then you have the obligation to buy the underlying asset on the maturity date: true. What are two ways to complete a futures trade: take or make delivery of the underlying asset, execute an offset trade. You are short one gold contract with a december maturity. What is the offset trade: long one gold contract with the december maturity. A bakery anticipates needing 100,000bu of wheat in three months. It is worried that the price of wheat might rise.
