Question: how do you do this? Let's assume we have speculators who hear about drought domage to the nation's com crop and decide they want to
Let's assume we have speculators who hear about drought domage to the nation's com crop and decide they want to trade com futures. A broker in contacted, the necessary forms are completed, and a speculator is told the margin requirement for a 5,000 bushel cor contract is on the CBOT are $1.200 initial and $800 maintenance per contract. (1) Our speculator puts in an order to go long a 5,000-bushel contract of December com futures at $3.50, and the order to go long at $3.50 is filled on July 2 m) Our speculator puts in an order to go short the same December corn futures at $3.90 on July 27, and the order to go short at $3.90 is filled in the same day. Please fill in the last two columns of the following table. Price Date Margin Action Balance (S) Sper bm 2-Jul $3.50 3-Jul $3.45 4-Jul Holiday 5-Jul $3.33 6-Jul $3.26 9-Jul $3.30 10-Jul $3.35 11-Jul $3.40 12-Jul $3.20 13-Jul $3.10 16-Jul $3.18 17-Jul $3.35 18-Jul $3.42 19-Jul $3.56 20-Jul $3.67 23-Jul $3.80 24-Jul $3.95 25-Jul $3.98 26-Jul $3.85 27-Jul $3.90 To make sure that you get the right answer. Please use two different ways to answer the following question: (1) Calculate his gain/loss by using his margin action and account balance. (2) Calculate his gain/loss by looking at the com prices. Let's assume we have speculators who hear about drought damage to the nation's corn crop and decide they want to trade com futures. A broker in contacted, the necessary forms are completed, and a speculator is told the margin requirement for a 5,000-bushel com contract is on the CBOT are $1,200 initial and 5800 maintenance per contract (1) Our speculator puts in an order to go long a5,000-bushel contract of December com futures at $3.50, and the order to go long at $3.50 is filled on July 2 (2) Our speculator puts in an order to go short the same December corn futures at $3.90 on July 27, and the order to go short at $3.90 is filled in the same day. Please fill in the last two columns of the following table. Price Date Margin Action Balance (5) (S. per bu. 2-Jul $3.50 3-Jul $3.45 4-Jul Holiday 5-Jul $3.33 6-Jul $3.26 9-Jul $3.30 10-Jul $3.35 11-Jul $3.40 12-Jul $3.20 13-Jul $3.10 16-Jul $3.18 17-Jul $3.35 18-Jul $3.42 19-Jul $3.56 20-Jul $3.67 23-Jul $3.80 24-Jul $3.95 25-Jul $3.98 26-Jul $3.85 27-Jul $3.90 To make sure that you get the right answer. Please use two different ways to answer the following question: (1) Calculate his gain/loss by using his margin action and account balance. (2) Calculate his gain/loss by looking at the cor prices
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
