# Treasury Futures Wild Card Option equation

I am confused about the equation on page 13 (upper right) from the CME: https://www.cmegroup.com/education/files/treasury-futures-basis-spreads.pdf

The equation calculates the move in the CTD that would make it worthwhile for the short futures contract holder to immediately exercise and sell the tail of the position.

In brief, the equation is

$$\textrm{Gross Basis} \times (CF / (1 - CF) < P_{late} - P_{2pm}$$

I understand that the 1-CF corresponds to the tail of the position. However, I don't understand why there is a CF in the numerator.