Question
1. Last week you sold a gold futures contract at $390 per ounce. The current price for a gold futures contract is $400 and so
1. Last week you sold a gold futures contract at $390 per ounce. The current price for a gold futures contract is $400 and so you are now losing $10/oz. You do not want to incur a loss of more than $20/oz. What order would you place with your broker now to try to limit your loss to this amount?
2. Last week you sold a gold futures contract at $415 per ounce. The current price per ounce for a gold futures contract is $400 and so you are now ahead by $15/oz. You would like it if the price of gold keeps falling, but you want to try to insure that you close out this trade with a gain of at least $5/oz. What order would you place with your broker now to try to accomplish this?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started