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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 happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
explain the exercise value, moneyness, and time value of an option
CFA® 2025 Level I Curriculum, Volume 5, Module 8.