Q3. On JAN 15, 2016 ZZTOP longed an APRIL2017 - MARCH 2017 calendar spread. The spread was USD1.90/unit. The spread was long APRIL 2017 short MAR 2017 futures.

3.1 Based on the info above, what did TTZOP expect will happen to the spread? Explain.

3.2 TTZOP kept the spread open and on AUG 15, 2016 the above spread was at USD2.50/unit. Did this present ZZTOP with a profit or a loss on its spread position? Explain.

3.3 On AUG 16, 2016 the same spread fell to USD1.70/unit. Given that on AUG 16, 2016 the APR 2017 futures settlement price increased by 20 cents, What must have happened to the MAR 2017 futures settlement price?