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Gold price today is $1,445; the futures price that expires in 6 months (June 2020) is $1,460 per ounce. You believe the price of gold
- Gold price today is $1,445; the futures price that expires in 6 months (June 2020) is $1,460 per ounce. You believe the price of gold will go up over the next 6 months. So you will buy one futures contract that expires in June 2020. There are 100 ounces of gold in each futures contracts and margin requirement for gold future is $3500 per contract.
- Whats your futures initial position value when you buy this future contract?
- If 6 months later, the price of gold goes up to $1470, whats the futures new position value?
- Whats your return on investment (ROI) from the trade?
- Whats the basis of the June 2020 futures?
- If the risk free rate is 3%, whats the gold futures price for June 2020 according to the Spot Future Parity?
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