1. Neil shorted a May 2016 futures contract for 40,000 pounds of lean hog (pig) a few months ago at a price of 78 cents a pound. Today hes decided to close his position and current contracts are at 81 cents a pound. Describe what actions Neil will take and what the income or loss on his position will be.

1. Neil will long a contract and realize profits of $1200
2. Neil will long a contract and realize losses of $1200
3. Neil will short a contract and realize profits of $1200
4. Neil will short a contract and realize profits of $120,000
5. Neil will buy in the spot market and will neither realize a profit nor a loss