On April 3, trader M, SHORTED two (2) gasoline futures for delivery month May for the...
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On April 3, trader M, SHORTED two (2) gasoline futures for delivery month May for the market price of cents67.85/gallon. There are 42,000 gallons in one futures. The required initial and maintenance margins Margin Spot month (May) Initial Maintenance $3,000 $2,100 Again: per gasoline futures are as follows: Non-Spot month (June) $2,000 $1,100 There are 42,000 gallons in one contract. Futures prices are given in cents/gallon. 2. Trader M held the short (2 May) futures position until April 12 without trading. 3. On April 12, M offset the (2 May) futures position at the settle price of cents 70.11/gallon. Also on April 12, M deposited enough money to bring the margin to $5,000. M did not withdraw the $5,000 from the margin account and did not trade until April 18. 4. On April 18, M SHORTED four (4) June gasoline futures for cents69.33/gallon and deposited $3,000 in the margin account to satisfy the initial margin requirement of (4)($2,000) = $8,000. (Recall that M kept $5,000 in the margin account.) 5. M did not trade on April 19 and April 20. On April 21, M quit the market by offsetting the short (4 June futures) position for the market price of cents71.18/gallon and withdrew the funds from the margin account. Fill in the numbers on the table in the two right columns. Date April 3 4 5 6 7 10 11 12 13 14 17 18 19 20 21 24 25 26 27 28 May contract (spot month) Trade Trade Settle price price price 67.85 67.85 69.46 66.43 64.55 64.95 67.29 69.00 70.11 June contract (non spot month) Settle price 70.11 68.81 70.02 72.08 73.86 74.62 74.65 74.16 72,23 76.16 78.12 78.12 74.12 69.33 71.18 65.00 65.93 63.93 62.46 62.89 64.41 65.91 66.84 65.81 66.54 68.21 69.33 70.23 71.36 71.18 69.18 71.38 72.33 72.27 71.22 Marking to market Cash flow in dollars Margin account Sum of money in dollars $6,000.00 On April 3, trader M, SHORTED two (2) gasoline futures for delivery month May for the market price of cents67.85/gallon. There are 42,000 gallons in one futures. The required initial and maintenance margins Margin Spot month (May) Initial Maintenance $3,000 $2,100 Again: per gasoline futures are as follows: Non-Spot month (June) $2,000 $1,100 There are 42,000 gallons in one contract. Futures prices are given in cents/gallon. 2. Trader M held the short (2 May) futures position until April 12 without trading. 3. On April 12, M offset the (2 May) futures position at the settle price of cents 70.11/gallon. Also on April 12, M deposited enough money to bring the margin to $5,000. M did not withdraw the $5,000 from the margin account and did not trade until April 18. 4. On April 18, M SHORTED four (4) June gasoline futures for cents69.33/gallon and deposited $3,000 in the margin account to satisfy the initial margin requirement of (4)($2,000) = $8,000. (Recall that M kept $5,000 in the margin account.) 5. M did not trade on April 19 and April 20. On April 21, M quit the market by offsetting the short (4 June futures) position for the market price of cents71.18/gallon and withdrew the funds from the margin account. Fill in the numbers on the table in the two right columns. Date April 3 4 5 6 7 10 11 12 13 14 17 18 19 20 21 24 25 26 27 28 May contract (spot month) Trade Trade Settle price price price 67.85 67.85 69.46 66.43 64.55 64.95 67.29 69.00 70.11 June contract (non spot month) Settle price 70.11 68.81 70.02 72.08 73.86 74.62 74.65 74.16 72,23 76.16 78.12 78.12 74.12 69.33 71.18 65.00 65.93 63.93 62.46 62.89 64.41 65.91 66.84 65.81 66.54 68.21 69.33 70.23 71.36 71.18 69.18 71.38 72.33 72.27 71.22 Marking to market Cash flow in dollars Margin account Sum of money in dollars $6,000.00
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May contract spot month Date Trade price Settle price Marking to market Cash flow in dollars Margin account Sum of money in dollars April 3 6785 6785 ... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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