Question
Consider an investor who contacts his/her broker on June 5 th to enter into short position on 3 December soybean futures contract. Each contract size
Consider an investor who contacts his/her broker on June 5th to enter into short position on 3 December soybean futures contract.
Each contract size is 50lbs. Initial margin requirement is $5000 per contract and maintenance margin requirement is $3750 per contract. Suppose that current futures price is $1250 per pound.
Using the daily settlement process, please answer the questions #1 - #3.
| date | futures price |
| loss/gain |
|
| Acct bal. (after adjusting margin call) | Margin call | |
| 5-Jun | $1,250 | /lbs |
|
|
|
|
| |
| $1,240 | /lbs |
|
|
|
| |||
| 6-Jun | $1,235 | /lbs |
|
| XXXXXXXXXXXXXXXXXXXXXXXX |
| ||
| 7-Jun | $1,215 | /lbs |
|
|
|
| ||
| 8-Jun | $1,245 | /lbs |
|
|
|
|
| |
| total cum.loss/gain= | ||||||||
#1. Are there any margin calls? If so, when and by how much?
#2. How much is the total cumulative loss/gain for this account?
#3. What is the appropriate account balance at the end of June 6th, which is the highlighted part in the table above?
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
