Question
Futures Margin) Assume that a trader goes SHORT Gold futures at a futures price of $ 2000. One contract is for 100 oz., the required
Futures Margin) Assume that a trader goes SHORT Gold futures at a futures price of $ 2000. One contract is for 100 oz., the required Initial Margin is $9000, and the Maintenance Margin is $5000. a) What gold price will barely trigger a margin call? b) If the Futures prices Rises to 2070, how much money will the trader pay due to the margin call? c) Assume a week after the margin call, the futures price drifts down to $2010 and the trader Buys to close out her futures position. (a) What is the traders overall profit or loss. (b) How much money can be removed from the account at that time.
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