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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 or said another way, cents over the May contract price. 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 did I makelose on my coffee futures trade just with the coffee futures exchange?
A
I made $
B
I made $
C
I made $
D
I made $
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