Chapter 02 · Section 2.1
IMM Futures
Suppose an IMM DM futures call option is exercised.
What is the effect of exercise?
c) The call holder receives a short futures contract.
No. If you are short a Deutsche Mark futures contract (like the one traded on the IMM), you have an obligation to deliver Deutsche Marks. But the DM call holder has a right to buy DM futures.
d) The call writer receives a short futures contract.
e) The call holder receives a long futures contract.
f) d and e
a) The call holder receives dollars.
b) The call writer receives dollars.
(Click here for help)