Chapter 02 · Section 2.1

Long DM

Now look at the opposite case: "Victor is long 250,000 March Deutsche Marks" What is the meaning of this statement?

a) Victor will have to take delivery and pay for DM 250,000 in March.
b) Victor must deliver DM 250,000 in March.
• c) Victor must sell DM 250,000 before March.
  No. Victor is long, he has bought DM 250,000 more than he has sold for delivery in March and is therefore a net owner. There is no requirement that he sell DM 250,000 before March or at any other time.
  d) Victor must buy DM 250,000 before March.

(Click here for help)