The long position in a futures contract is the party that will:
A) benefit from decreases in the price of the underlying asset.
B) agree to make delivery of a commodity or financial instrument at a future date.
C) benefit from increases in the price of the underlying asset.
D) accept the greater share of the risk.

Question

Quizplus · Accepted Answer

The long position in a futures contract is the party that benefits from increases in the price of the underlying asset. They are essentially betting that the price will rise, and they can sell the futures contract at a profit. The short position is the party that benefits from decreases in the price of the underlying asset. They are essentially betting that the price will fall, and they can buy the futures contract back at a lower price, pocketing the difference as profit.

The Long Position in a Futures Contract Is the Party