Long futures payoff
Payoff for buyer of futures: Long futures The payoff for a person who buys a futures contract is similar to the payoff for a person who holds an asset. He has a potentially unlimited upside as well as a potentially unlimited downside. Payoff for buyer of futures: Long futures The payoff for a person who buys a futures contract is similar to the payoff for a person who holds an asset. He has a potentially unlimited upside as well as a potentially unlimited downside. In general, the payoff from a long position in a forward contract ( long forward contract) on one unit of its underlying asset or commodity is: payoff long = S T - K where: S T is the spot price of the underlying at maturity of the contract K is the delivery price agreed in the contract.