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Basic Question 4 of 11
When a call option on a future is exercised, the buyer receives ______.
B. a long position in the underlying future and a cash payment
C. the physical good
A. an option to purchase the underlying future
B. a long position in the underlying future and a cash payment
C. the physical good
User Contributed Comments 3
| User | Comment |
|---|---|
| johntan1979 | Isn't that amazing? Make money on the option (in-the-money), and then make more money on the future. |
| Inaganti6 | how is money made on the option...call had to be paid for.....short put and short call i can understand as you get the premium. |
| Kiniry | Does the cash payment come from the mark-to-market on the future once you actually own it? |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the exercise value, moneyness, and time value of an option
CFA® 2025 Level I Curriculum, Volume 5, Module 8.