The Main Reason to Buy an Option on a Futures

question 104

Multiple Choice

The main reason to buy an option on a futures contract rather than the futures contract itself is

• A) to reduce transaction cost.
• B) to preserve the possibility for gains.
• C) to limit losses.
• D) to remove the possibility for gains.

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Definitions:

Electrical Impulse

A rapid surge of electrical energy or power, which in biological systems, is how neurons communicate information.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, coordinating its actions and sensory information.

Civic Engagement

The involvement of individuals in the decision-making processes, community activities, and democratic life, often aimed at improving conditions for others or shaping community development.

Social Capital

The networks, relationships, and norms that facilitate collective action and cooperation for mutual benefit in societies.