Chapter 02 · Section 2.1

IMM DM Futures-Q1

It is now May. Our investor is still short 1 IMM June DM Futures contract. He decides that he wants to close his position. Our investor can close his position:

a) by selling 125,000 Deutsche Marks.
• b) by buying 125,000 Deutsche Marks.
  No. He would still have a short position. By buying DM 125,000, he has merely acquired in May the Deutsche Marks that he must deliver in June to fulfill the obligation of his futures contract.
  c) by selling 1 IMM June DM Futures contract.
  d) by buying 1 IMM June DM Futures contract.
  e) by selling 1 IMM May DM Futures contract.
  f) by buying 1 IMM May DM Futures contract.

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