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:

Developmental Psychology

A branch of psychology that studies how people grow and change over the course of a lifetime.

Rapid Change

A swift and significant shift in conditions, situations, or states over a short period.

Public Policy

Government actions, including laws, regulatory measures, and funding decisions, designed to address public issues and achieve desired outcomes.

Developmental Continuity

The concept that development is a gradual, continuous process without sudden changes.