This flashcard is just one of a free flashcard set. See all flashcards!
26
One futures contract is traded where both the long and short parties are closing out existing positions. What is the resultant change in the open interest?
A. No change
B.Decrease by one
C.Decrease by two
D.Increase by one
A. No change
B.Decrease by one
C.Decrease by two
D.Increase by one
Answer: B
The open interest goes down by one. There is one less long position and one less short position.
The open interest goes down by one. There is one less long position and one less short position.
michaelarrington (18.09.2024)
You’re right! The open interest in futures contracts reflects the total number of outstanding contracts. When both http://papaspizzeria2.org/ the long and short parties in a trade are closing out existing positions, the result is a reduction in the number of open contracts. Specifically, because both the long and short positions are being closed out, the open interest decreases by one.
RoseBL (26.08.2024)
Thanks for the clear explanation of the one-year futures contract. The difference between futures and options has helped me understand more about these financial instruments. http://flappybirdgame.io
Jhon (11.07.2024)
Everything tastes better when it is free, and meals at Wendy's have already tasted good, so a free Wendy's sandwich is going to taste out of this world. Participate in Wendy's survey at the official Wendy's site. Here, https://talktowendys.page is the talktowendys survey link; follow it and get either a $500 cash prize or a free Sandwich at Wendy's.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015