IT soybean oil drops $.10, what is the equity of the account when marked-to-market? You are day-trading
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are day-trading the S&P E-Mini contract with $5,250.00 of equity in your account. Contract specs are as follows: CONTRACT UNIT $50 x S&P 500 INDEX QUOTE UNITS US$ AND CENTS/TIC CONTRACT UNIT 100 TROY OUNCES I TIC SIZE 0.25 INDEX PTS= $12.50 QUOTE UNITS US$ AND CENTS/TROZ CONTRACT MOS. Mar, Jun, Sep, Dec TIC SIZE 0.10/TrOZ = $10.00 Based on your new sophisticated algorithm, there is an 85% chance that the S & P will fall over the next half hour, so you go all in by selling 6 June contracts. The market rises 5 tics, and then plunges 50 tics when you flatten your position (buy to close them all). What was your gross profit or loss for the day? . After the trade in Problem 2, you decide to buy October gold futures. Contract specs are as follows: INITIAL MARGIN $907.50/ CONTRACT (DAY-TRADE) CONTRACT MOS. 3 NEAREST MOS. + Feb, Apr, Aug, Oct MAINT MARGIN $825/ CONTRACT (DAY- TRADE) INITIAL MARGIN $6,250/ CONTRACT MAINT MARGIN $5,000/ CONTRACT a. How many contracts can you (safely) buy? b. If gold then declines $3.65 per troy ounce, what is the market-to-market equity in the account? You are day-trading the S&P E-Mini contract with $5,250.00 of equity in your account. Contract specs are as follows: CONTRACT UNIT $50 x S&P 500 INDEX QUOTE UNITS US$ AND CENTS/TIC CONTRACT UNIT 100 TROY OUNCES I TIC SIZE 0.25 INDEX PTS= $12.50 QUOTE UNITS US$ AND CENTS/TROZ CONTRACT MOS. Mar, Jun, Sep, Dec TIC SIZE 0.10/TrOZ = $10.00 Based on your new sophisticated algorithm, there is an 85% chance that the S & P will fall over the next half hour, so you go all in by selling 6 June contracts. The market rises 5 tics, and then plunges 50 tics when you flatten your position (buy to close them all). What was your gross profit or loss for the day? . After the trade in Problem 2, you decide to buy October gold futures. Contract specs are as follows: INITIAL MARGIN $907.50/ CONTRACT (DAY-TRADE) CONTRACT MOS. 3 NEAREST MOS. + Feb, Apr, Aug, Oct MAINT MARGIN $825/ CONTRACT (DAY- TRADE) INITIAL MARGIN $6,250/ CONTRACT MAINT MARGIN $5,000/ CONTRACT a. How many contracts can you (safely) buy? b. If gold then declines $3.65 per troy ounce, what is the market-to-market equity in the account?
Expert Answer:
Answer rating: 100% (QA)
ANSWER Lets solve the problem step by step Gross profit or loss for the SP EMini contract a You sold 6 June contracts when the SP 500 index was expected to fall b The market initially rises 5 tics 025 ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
Students also viewed these accounting questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
A physical pendulum of mass m = 3 . 3 6 kg is comprised of an odd shape that has a centre - of - mass a distance of d = 0 . 5 5 5 m from the pivot point. The pendulum is displaced from equilibrium to...
-
The comparative balance sheets for Strackman Lux Company as of December 31 are presented below. Additional information: 1. Operating expenses include depreciation expense of $40,000. 2. Land was sold...
-
Identify and discuss the important issues associated with successfully managing team meetings?
-
How might the market value of a firm differ from its intrinsic value?
-
Suresh Co. expects its five departments to yield the following income for next year. Recompute and prepare the departmental income statements (including a combined total column) for the company under...
-
A $1,000 par value bond that pays interest annually just paid $74 in interest. What is the coupon rate? Q2) A 05.00% coupon, 22-year annual bond is priced at $925. What is the current yield for this...
-
Profitability remains a challenge for banks and thrifts with less than $ 2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an...
-
Every morning Azri uses the same path heading to his office in Universiti Utara Malaysia (UUM). Every time he enters the UUM's entrance, the green scenery and the fresh air of UUM's tropical lush...
-
Exhibit V Cost Item Flowers Table Decorations Reception Supplies Selling Price 70 75 60 Direct Materials 40 20 10 Direct Labour 5 15 33 Variable Overhead 7 14 4 Selling and Admin 10 5 3 Office costs...
-
Write a program which takes two integers and print their sum,subtraction, multiplication, and division.Use a function with four output parameters.
-
Draw a flowchart to find if the user's input number is a prime number. Assume the number is an integer.
-
If Your Taxable Income Is Up to $ 8 , 9 2 5 $ 8 , 9 2 5 - $ 3 6 . 2 5 0 $ 3 6 , 2 5 0 - $ 8 7 . 8 5 0 2 0 1 3 Individual Tax Rates Single Individuals You Pay This Amount on the Base of the Bracket...
-
Based on the given information from Textbook Exercise E4-19 - Daily Driver, Inc., pages 194-195, prepare T- Accounts. Post the following to T-Accounts in the attached spreadsheet: balances of the...
-
USCo, a U.S. corporation, receives $700,000 of foreign-source passive income on which foreign taxes of $70,000 are withheld. Its worldwide taxable income is $1,500,000, and its U.S. tax liability...
-
Why is homeostasis defined as the "relative constancy of the internal environments? Does negative feedback or positive feedback tend to promote homeostasis?
-
A: Suppose you have a homothetic production technology and you face input prices (w,r). (a) On a graph with labor on the horizontal and capital k on the vertical axis, illustrate a ray along which...
-
We have argued in this chapter that it is difficult to find taxes that are efficienti.e. taxes that do not give rise to a deadweight loss. Economists have long pointed to one exception to this...
-
We have illustrated in several settings the role of actuarially fair insurance contracts (b, p) (where b is the insurance benefit in the bad state and p is the insurance premium that has to be paid...
-
As problems 5.18 and 5.19 reflect, the air temperature in the test section of conventional hypersonic wind tunnels is low. In reality, air liquefies at a temperature of about \(50 \mathrm{~K}\)...
-
The reservoir temperature calculated in problem 5.20 is beyond the capabilities of heaters in the reservoir of continuous-flow wind tunnels using air. This is why you do not see a Mach 20...
-
Write the \(y\) component of Eq. (6.7), and use it to derive Eq. (6.12). Equation 6.12: \(\frac{\partial(ho v)}{\partial t}+abla \cdot(ho v \mathbf{V})=-\frac{\partial p}{\partial y}+ho f_y\) V pfd7...
Study smarter with the SolutionInn App