The difference between call option and long position in future contract is to be determined. Introduction: The call option is a contract in which the holder has the right to buy the underlying asset. The call option is a type of the option contract. The option contract is of two types − call option and put option. The future contract is based is on the two types of position which are long position and the short position. In this holder of the long position can buy asset from the short position at the cost of future price.

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Chapter 2, Problem 22PS

Summary Introduction

To determine: The difference between call option and long position in future contract is to be determined.

Introduction:

The call option is a contract in which the holder has the right to buy the underlying asset. The call option is a type of the option contract. The option contract is of two types − call option and put option.

The future contract is based is on the two types of position which are long position and the short position. In this holder of the long position can buy asset from the short position at the cost of future price.

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