Question $4$

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Marked out of $2\mathrm{.}00$

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Suppose that on Monday, $7$ July, you assume a long position in one December British pound futures contract at the futures price of $$\frac{1\mathrm{.}20}{}.$ The initial margin is $$2,000,$ and the maintenance margin is $$1,500.$ The contract size is $125,000.$ Assume you do not withdraw excess money from your margin balance. All margin requirements are met with cash. You hold your long position through Thursday, $10$ July and short the same contract $($a reversing trade$)$ at the opening price of $$1\mathrm{.}15.$ The settlement prices on Monday, Tuesday and Wednesday are listed in the following:

Monday: $$1\mathrm{.}21$

Tuesday: $$1\mathrm{.}25$

Wednesday: $$1\mathrm{.}17$

What is your total gain or loss from this position?

Select one:

a$.$ $$6,250$ loss

b$.$ $$6,000$ loss

c$.$ $$6,750$ gain

d$.$ $$6,000$ gain