Assuming you are required to pay initial margin of RM8000/contract and maintain 85% of it, commission is charged at RM105/contract. The table below is the settlement index prices for the following trading days:

 

Day	Today	1	2	3	4
Implied rate	9.90	10.15	9.80	9.65	9.72

 

Required:

 

1. Determine the contract value, initial margin and maintenance margin.
2. Prepare a complete marked-to-market position based on the above information.
3. If the trader decides to close-out his position on day 5 at RM995, calculate his realised profit or loss.
4. Conclude the result from the above strategy.

Answer rating: 100% (QA)

a Determine the contract value initial margin and maintenance margin The initial margin is given as RM8000 per contract The maintenance margin is 85 o... View the full answer