Question
An investor takes a long position in 1 November Gold futures contract on September 10 (Day 1). The contract size is 100 oz. The current
An investor takes a long position in 1 November Gold futures contract on September 10 (Day 1). The contract size is 100 oz. The current futures price is US$1800. The initial margin requirement per contract is US$5,000/contract and the maintenance margin is US$4,500/contract.
The following table shows the futures prices at the closing of next four days
Day | Price |
1 | 1782 |
2 | 1817.64 |
3 | 1781.29 |
4 | 1808.01 |
Draw a table of Mark to Market (MTM) similar to the table in Example 2 in the teaching note.
Do you get a margin call at the close on day 1?
Do you get a margin call at the close on day 2?
Do you get a margin call at the close on day 3?
Do you get a margin call at the close on day 4?
Can you withdraw money from your account at the close on day 2? If yes, how much money can you withdraw now?
Can you withdraw money from your account at the close on day 4? If yes, how much money can you withdraw now?
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