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Suppose that in september 2015 a company takes a long position in a contract on May 2016 crude oil futures. it closes out its position
Suppose that in september 2015 a company takes a long position in a contract on May 2016 crude oil futures. it closes out its position in march 2016. the futures price ( per barrel) is 88.30 dollars when it enters into the contract,90.50 dollars when it closes out its position , and 89.10 dollars at the end of decelber 2015. One contract is for the delivery of 1000 barrels. what is the company's total profit ? when is it realized? how is it taxed if it is (a) a hedger and (b) a speculator? assume that the company has a december 31year-end.
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