A contract that results in the delivery of a futures contract when exercised is a
A)put option.
B)call option.
C)naked option.
D)futures option.
E)credit spread call option.

Question

A contract that results in the delivery of a futures contract when exercised is a
A)put option.
B)call option.
C)naked option.
D)futures option.
E)credit spread call option.

Quizplus · Accepted Answer

A futures option gives the holder the right, but not the obligation, to buy or sell a futures contract at a specified price before the option expires. When exercised, the option results in the delivery of a futures contract. Put and call options refer to options on individual securities, while a naked option is an option that is not covered by a corresponding position in the underlying asset. A credit spread call option is a specific type of options trading strategy that involves selling one call option and simultaneously purchasing another call option at a higher strike price, creating a net credit.

A Contract That Results in the Delivery of a Futures