Cryptocurrency Q&A
What happens if you don't sell futures contract?
What happens if you don't sell futures contract?
lucas_lewis_inventor
Fri May 17 2024
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7 answers
1340
I'm curious, what exactly happens if you decide not to sell your futures contract? I've been hearing a lot about the risks involved in futures trading, but I'm still a bit hazy on the consequences of holding onto a contract beyond its expiration date. Could you elaborate on the potential outcomes? I'm particularly interested in understanding the financial implications and how it might affect my portfolio. Is it possible to lose more than my initial investment? And what are the strategic considerations one should make when deciding whether to sell or hold a futures contract?
7 answers
CryptoVanguard
Sun May 19 2024
The cash settlement process is straightforward and automated. Once the expiration date is reached, the exchange or platform where the contract was traded will calculate the settlement amount based on the market prices.
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Stefano
Sun May 19 2024
If the investor has made a profit, the amount will be credited to their account. Conversely, if there is a loss, the amount will be debited from the account. This ensures that the investor's position is settled accurately and promptly.
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DigitalLord
Sun May 19 2024
In the realm of cryptocurrency and finance, inactivity can lead to unintended consequences. If an investor remains passive in regards to a contract, it will eventually reach its designated conclusion. This conclusion is determined by the specific terms outlined in the contract.
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EthereumEmpire
Sun May 19 2024
Alternatively, some contracts may specify physical delivery as the means of settlement. In such cases, the investor is obligated to take delivery of the underlying asset at the expiration of the contract.
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SeoulStyle
Sun May 19 2024
For contracts that are settled in cash, the final calculation is based solely on the market prices at the time of expiration. These prices reflect the current value of the underlying asset and determine the profit or loss realized by the investor.
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