Question

In: Finance

Open interest includes: Multiple Choice only contracts with a specified delivery date. only long or short...

Open interest includes:

Multiple Choice

  • only contracts with a specified delivery date.

  • only long or short positions but not both.

  • the sum of long or short positions and clearinghouse positions.

  • the sum of short, long, and clearinghouse positions.

  • the sum of short and long positions.

Solutions

Expert Solution

Option B is correct

Open interest includes only long or short positions but not both. Open interest is the total number of contracts that are currently outstanding. For every buy, there is a sell contract and hence we count only either of them not both.

Option A is incorrect because open interest can be calculated for all delivery dates individually

Option C is incorrect because the clearinghouse positions are not included

Option D is incorrect because either long or short positions are included but not both. Clearinghouse positions are not included

Option E is incorrect because either long or short positions are included but not both.


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