Crude oil contracts are $1,000$ barrels, are quoted in dollars per barrel, and the initial margin is $9,000$ per

contract. Soybean contracts are $5,000$ bushels, are quoted in cents per bushel, and have an initial margin of

$$4,725.$ E$-$mini S&P $500$ contracts are quoted in S&P $500$ index value with a $$50$ multiplier and have an

initial margin of $$12,650$ per contract.

L Distribution $($JLD$)$ plans to hedge its November purchase of crude oil.

a$.$ What is JLD$$s spot market position in crude oil?

b$.$ To hedge the November spot market crude oil purchase, what will be JLD$$s trades in the

futures market look like?

c$.$ If crude oil prices go up will JLD make a profit or loss on its hedge position?

d$.$ Describe how JLD$$s futures markets trades hedge the spot market price of its crude oil.