Let us assume that at time \(t\) (now), the futures price of an underlying asset is

The strike of the futures option is \(K=\$ 140\), and \(F_{\text {last }}\) is the last settlement futures price that was observed at the end of the previous trading day. Let assume that it was

This means that, if the call option is exercised, the holder will receive a cash amount

plus a long position in the underlying contract. If the holder immediately closes out her long position in the futures, she will earn

Hence, the total profit is

corresponding to the familiar call option payoff on a spot asset.

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F = $151. Ft=