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.
• c) by selling 1 IMM June DM Futures contract.
  No. He is already short 1 futures contract (i.e. he has sold more than he has bought). By selling a June futures contract, he would increase his short position rather than liquidate it.
  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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