it is now July 2016 and the crude oil futures prices for November delivery is $42/barreI. the backwardation between the November-December 2016 contract is $1.50/barrel.

A hedge fund manager believes that it would be a warm winter and the November-December pair would turn to $0.25/barrel contango.She sells 50 lots of the November 2016 contract and simultaneously buys 50 lots of the December 2016 contract.

Ignoring transactions costs and given that each lot of the futures contract is 1000 barrel of crude oil, calculate the profit generated by this strategy if the fund manager's view of the market comes true accurately by August 2016 and she unwinds her trades?