Question
1. You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a premium of USD0.008 per JPY and with an
1. You write a put option on JPY with a strike price of USD0.008/JPY (JPY125.00/USD) at a premium of USD0.008 per JPY and with an expiration date six months from now. The option is for JPY12,500,000. What is your profit or loss at maturity if the ending spot rates are;
a. JPY110.00/USD
b. JPY122.00/USD
c. JPY135.00/USD
d. JPY140.00/USD
2. A newspaper shows the following prices for the previous days CME trading in USD/EUR currency futures:
Month | March |
Open | 1.3324 |
High | 1.3389 |
Low | 1.3299 |
Settlement | 1.3336 |
Change | +.0012 |
Lifetime High | 1.4147 |
Lifetime Low | 1.3098 |
Open Interest | 111,360 |
a. What do the above terms indicate?
b. What is the USD value for this contract? Show your calculations.
c. If your initial margin account required a deposit of USD3000, what would be the current value of your account if you had shorted one EUR futures contract at the lifetime high?
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