Assume the current spot price of oil is $90/barrel and the future price is $90.64/barrel. You enter
Question:
Assume the current spot price of oil is $90/barrel and the future price is $90.64/barrel. You enter into 2 short future contracts today (10/1/19), each contract is for 100 barrels of oil. Your initial margin is $1,500 per contract and your margin call occurs at $1,000 per contract.
Day Future Price
10/1/2019 90.64
10/2/2019 84.66
10/3/2019 78.21
10/4/2019 85.67
10/7/2019 91.95
10/8/2019 99.22
10/9/2019 103.11
10/10/2019 106.22
What does your margin account have in it at the end of each day? The risk-free rate is 2.60% per annum with daily compounding (assume 260 day year). If there is a margin call, note that there is a margin call and record that you deposit the necessary money into the account as a separate transaction instantaneously, i.e. if on 10/2 you needed to put in $1,500 at the end of the day you should show a deposit of $1,500 on 10/2 after the close of the day.