A speculator believes that the share price at the BMSB will be al a downward direction in the near future. You asked your broker to short 30 KLCI futures contracts at a price of 855. Based on the information given below and assuming that you are required to pay initial margin of RM3.000 per contract and maintain 85% of it: 

Date                                                                Settlement Price (RM) 

November 6 (Entry)                                               855 

November 7                                                            870 

November &                                                           836 

November 9                                                            862

 November 10                                                         853 

November 11                                                          840 

Prepare your marked-to-market position. 

Is there any margin call? 

Calculate the leverage effect on the fifth day of trading.

Answer rating: 100% (QA)

SOLUTION First lets calculate the markedtomarket position of the short futures posi... View the full answer