Assume you hold a Nasdaq 100 index fund worth $2,000,000 on the trading session day. You aim to use Equity index future products to hedge your price risk. You also have $100,000 USD cash on hand at the beginning of your trading.

You must use at minimum 50% of your account balance to hedge your stock price risk. Meanwhile, you are allowed to have up to 50% of your account balance to speculating/arbitraging, and the speculation/arbitrage products are not limited to Equity Index futures (e.g., other future products, you can even use Crypto futures to earn short-term profit, but also mind the potential loss). You can take both long and short positions in the future contracts

1. Summarize your hedging strategy (6 marks) Provide a summary on how you use Equity Index future products to hedge your stock market price risk. The content should include but not limited to: How much percentage do you hedge your portfolio? And why? Which future product(s) you use to hedge your risk, outline their basic specs? What strategy you employed to hedge (e.g., delivery month, contract price, contract amount, long or short, etc)? What is the performance of your hedging by the end of your last trading date? And how the spot price change for your fund holding?

2. Summarize your speculation trading (7 marks) Provide a summary on how you use future contracts to speculate/arbitrage during your trading period. The content should include but not limited to: Do you think the 50% limits allocated on speculation is too high? And why? Do you feel speculation is risky from your trading exercise? How the speculation performed and explain your profit/loss? How your speculation strategy differs from last time (Trading session 1)? How you feel when you experience losses from the speculation?

Nasqad 100 Currency in Real Time-USD

Date	Open	High	Low	Close*	Adj. close**	Volume
07 Oct 2022	11,272.46	11,293.65	10,991.66	11,039.47	11,039.47	4,634,190,000
06 Oct 2022	11,556.40	11,660.55	11,472.83	11,485.50	11,485.50	4,423,320,000
05 Oct 2022	11,429.47	11,647.62	11,312.52	11,573.18	11,573.18	4,091,860,000
04 Oct 2022	11,477.85	11,609.25	11,462.37	11,582.54	11,582.54	5,004,780,000
03 Oct 2022	11,059.17	11,296.43	10,985.01	11,229.73	11,229.73	4,415,440,00