Question
Assume that you enter into a long futures contract on gold when the futures price is $1,767 per ounce. The size of the contract is
Assume that you enter into a long futures contract on gold when the futures price is $1,767 per ounce. The size of the contract is 2,000 ounces. The initial margin is $10,000 and the maintenance margin is $7,500.
a) What change in the futures price will lead to a margin call?
b) What price change will allow you to withdraw $3,000 from the margin account?
Step by Step Solution
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Step: 1
a To determine the change in the futures price that will lead to a margin call we need to calculate ...
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
