You must have a short position in a future contract if you entered a commodity futures contract 90 days ago and the underlying commodity's price dropped.
A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a predetermined price on a predetermined date in the future. Commodity futures can be used to safeguard or hedge an investment in the stock market. Additionally, they can be employed to place directional wagers on the underlying asset.
Most contracts for commodities futures are closed off or netted at their expiration date. To reconcile the price discrepancy between the opening and closing trades, cash is employed. Investing in an underlying asset typically involves using commodities futures.
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