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I export coffee from Colombia. Starbucks, the importer, is my client. Today, I call Starbucks and ask if they would like to purchase 1 8
I export coffee from Colombia. Starbucks, the importer, is my client. Today, I call Starbucks and ask if they would like to purchase pounds of coffee for May delivery. Starbucks agrees and we settle on a price of May plus May Today, the May coffee futures contract is priced at Fast forward into the future where for purposes of this scenario, assume that there are two days left in the May contract trading period and the price of the May coffee futures contract is now I call Starbucks, and we agree to settle our business based on the new market price of not taking into consideration the cent premium Assume I did everything by the book in terms of my hedging strategy, based on what we learned in class.
How much am I left with in US dollars as a combination of my gain or loss on the futures contract side of the equation and the amount of money that I collected from Starbucks?
A
$ as a positive, dollar amount.
B
$ as a negative, dollar amount.
C
$ as a positive, dollar amount.
D
$ as a negative, dollar amount.
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