You purchased 2 Soybean Oil futures contracts today at the settlement price (labeled as Settle) listed as
Question:
You purchased 2 Soybean Oil futures contracts today at the settlement price (labeled as “Settle”) listed as following.
Soybean Oil (CBT) 60,000 lbs.; cents per lb. | ||||||||
Lifetime | ||||||||
Open | High | Low | Settle | Change | High | Low | Open Interest | |
Oct. | 15.28 | 15.33 | 15.25 | 15.29 | -.02 | 20.35 | 15.25 | 7,441 |
Part I.
If there is a 10% initial margin requirement on total value of underlyings, how much do you have to deposit? Maintenance margin requirement is $600 for each contract. In what situation will you receive a margin call from your broker?
Part II.
Assume the volatility of Soybean Oil immediately increases 20%. How will it impact Futures price? How will it impact investor’s margin account requirement? Explain your answer.
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin