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Option on futures

An option whose exercise hands the holder a futures position rather than the asset itself.

How to read the number

Russian exchange-traded options are built this way: the underlying is the futures contract of the matching series, not the share or the currency directly.

When the metric lies

Exercise does not end the story, it starts a new one: a futures position appears with its collateral and daily revaluation, and it has to be serviced.

Also known as: futures option

Related terms