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Assume that a trader goes LONG Gold futures at a futures price of $1800 on Oct. 1. One contract is for 100 oz., the required
Assume that a trader goes LONG Gold futures at a futures price of $1800 on Oct. 1. One contract is for 100 oz., the required Initial Margin is $9000, and the Maintenance Margin is $5000.
a) What gold price will trigger a margin call?
b) How much money will the trader have to add to meet the margin call?
c) Assume a day after the margin call, Gold price is still the same, and the trader places a sell order to close out the position. How much money can be removed from the account at that time, and, what was the traders overall profit or loss.
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