Consider an investor who contacts his/her broker on June 5 th to enter into short position on
Question:
Consider an investor who contacts his/her broker on June 5th to enter into short position on 3 December soybean futures contract.
Each contract size is 50lbs. Initial margin requirement is $5000 per contract and maintenance margin requirement is $3750 per contract. Suppose that current futures price is $1250 per pound.
Using the daily settlement process, please answer the questions #1 - #3.
date | futures price | loss/gain | Acct bal. (after adjusting margin call) | Margin call | ||||
5-Jun | $1,250 | /lbs | ||||||
$1,240 | /lbs | |||||||
6-Jun | $1,235 | /lbs | XXXXXXXXXXXXXXXXXXXXXXXX | |||||
7-Jun | $1,215 | /lbs | ||||||
8-Jun | $1,245 | /lbs | ||||||
total cum.loss/gain= |
#1. Are there any margin calls? If so, when and by how much?
#2. How much is the total cumulative loss/gain for this account?
#3. What is the appropriate account balance at the end of June 6th, which is the highlighted part in the table above?
Investments Analysis And Management
ISBN: 9781118975589
13th Edition
Authors: Charles P. Jones, Gerald R. Jensen