As at 1st July 2021, the firm has observed the price for CPO futures between August and September. The firm will take advantage with the revealing of the CPO prices in the futures market with spreading strategy. The firm to spread half of 5,000 tones and use the below information to construct the strategy.

Assume in the middle of August 2021, the price as follows:

Spot futures CPO price: RM4530

Spot CPO price: RM3888

One-month futures CPO: RM4610

Two-month futures CPO price: RM4720

Three-month futures CPO price: RM481

Required:

a) Construct the spreading strategy and assume if there is a commission fee of RM102/per turn round.

b) Analyse the above result.