LOS 59.E: DESCRIBE HOW A FUTURES CONTRACT CAN BE TERMINATED AT OR PRIOR TO EXPIRATION; Flashcards Preview

L1 59 Futures Markets and Contracts > LOS 59.E: DESCRIBE HOW A FUTURES CONTRACT CAN BE TERMINATED AT OR PRIOR TO EXPIRATION; > Flashcards

Flashcards in LOS 59.E: DESCRIBE HOW A FUTURES CONTRACT CAN BE TERMINATED AT OR PRIOR TO EXPIRATION; Deck (1)
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1
Q

DESCRIBE HOW A FUTURES CONTRACT CAN BE

TERMINATED AT OR PRIOR TO EXPIRATION;

A

Exiting a Futures Position
• Execute an offsetting transaction.
 If Long, short same contract
 If Short, go long
• Deliver underlying asset at termination.
 Delivery terms (quantity, quality, location, etc.) are standard in the
contract.
• Cash settlement at expiration.
• Exchange for Physicals.
 Negotiate early delivery of underlying asset.