Explain the difference between a call option and a long position in a futures contract.

The difference between a call option and a long position lies in the ability to exercise the powers and obligations that come with the contract. A call option enables its owner to have the right, but not the obligation, to purchase the underlying asset at a futures price. Only the money lost for purchasing the call option is lost, should buying the assets at a futures price turn to be unprofitable. A long position, on the other hand, forces the owner to buy the assets at a futures price.

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Academic.Tips. (2022, November 24). Explain the difference between a call option and a long position in a futures contract. https://academic.tips/question/explain-the-difference-between-a-call-option-and-a-long-position-in-a-futures-contract/

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Academic.Tips. 2022. "Explain the difference between a call option and a long position in a futures contract." November 24, 2022. https://academic.tips/question/explain-the-difference-between-a-call-option-and-a-long-position-in-a-futures-contract/.

1. Academic.Tips. "Explain the difference between a call option and a long position in a futures contract." November 24, 2022. https://academic.tips/question/explain-the-difference-between-a-call-option-and-a-long-position-in-a-futures-contract/.


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Academic.Tips. "Explain the difference between a call option and a long position in a futures contract." November 24, 2022. https://academic.tips/question/explain-the-difference-between-a-call-option-and-a-long-position-in-a-futures-contract/.

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"Explain the difference between a call option and a long position in a futures contract." Academic.Tips, 24 Nov. 2022, academic.tips/question/explain-the-difference-between-a-call-option-and-a-long-position-in-a-futures-contract/.

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