The correct answer is A.

Statement I is incorrect: Speculators are actually subject to higher (or at least not lower) margin requirements compared to hedgers. Speculators take on more risk because they have no offsetting position in the underlying asset, so exchanges require them to post a larger margin to protect against default. Hedgers, who use futures to offset an existing position in the underlying asset, typically face lower margin requirements due to the reduced risk profile.

Statement II is correct: A spread transaction does indeed involve simultaneously taking a long position in futures on a specific asset for one delivery time and a short position in futures on the same asset for a different maturity or delivery time. This is a common strategy used by traders to profit from the price difference between two related futures contracts.

Statement III is correct: Futures contracts are marked-to-market and settled on a daily basis (known as daily settlement or daily resettlement), while forward contracts are only settled at the maturity/expiration date. This is one of the key differences between futures and forwards.

Therefore, only Statement I is incorrect, making A (Statement I only) the correct answer.

Key Things to Remember:

1. Futures contracts and forward contracts are both derivatives that derive their value from an underlying asset. However, they have key differences in terms of their trading, settlement, and margin requirements.
2. Futures contracts are traded on an exchange, which means they are standardized contracts. Forward contracts, on the other hand, are private agreements between two parties and can be customized.
3. In futures trading, the margin is a good faith deposit needed to control a futures contract. The margin requirements are set by the futures exchanges and are typically 5% to 10% of the contract value.
4. Hedgers and speculators are the two main types of traders in the futures market. Hedgers use futures contracts to reduce or eliminate the risk of price changes, while speculators bet on future price movements hoping to make a profit.