Kieran is a gold futures trader on NYMEX, and on this exchange, futures prices are quoted in dollars and cents per ounce and are traded in lot sizes of 100 troy ounces. Assume that the annual volatility is 20 percent and that the current price is US$1,250 per ounce. Assuming a normal distribution for the returns, how much should be the margin that provides a sufficient buffer at 99 percent confidence level over 1 day for 1 contract? Explain why a futures exchange like NYMEX requires margins to be held.