Question: Calculate the margin on this short - the - basis transaction: Make a sale of wheat to a mill at + 1 5 DEC for

Calculate the margin on this short-the-basis transaction:
Make a sale of wheat to a mill at +15 DEC for Oct/Nov delivery.
Purchase wheat from farmers for delivery direct from the farm to the mill at -15 DEC during October and November.
Farmer delivers grain using his trucks. No freight cost to you.
You are paid by the mill upon delivery and in turn pay the farmer resulting in NO cost-of-carry to you

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!