How Do Traders Establish a 'Long' or 'Short' Futures Position

question 99

Essay

How do traders establish a 'long' or 'short' futures position? Explain how these positions can be subsequently 'closed-out'.

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Definitions:

Common Stock

Represents ownership shares in a corporation, giving holders a claim on part of the company's profits in the form of dividends and voting rights.

Par Value

The face value or nominal value of a security as stated by the issuer, often used in reference to stocks and bonds.

Federal Agency

A government organization established to perform a specific function or range of functions at the national level.

Major Stock Exchanges

Platforms where stocks and other securities are bought and sold, including the New York Stock Exchange and Nasdaq.