Question
Today you are long a heating oil forward contract for March delivery in Chicago @ $ 1.54/gal and short a NYMEX March heating oil (HOH)
Today you are long a heating oil forward contract for March delivery in Chicago @ $ 1.54/gal and short a
NYMEX March heating oil (HOH) contract at $1.54.
On February 18 you sell a March Chicago HO vs NYMEX HOH basis at < $.05>the board.You negotiate an EFP
with your counter party @ $1.60/gal
a).How much $ did you make (+ or -) in $ per gal
b).Show the cash flows of the trade
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Microeconomics
Authors: Glenn Hubbard, Anthony O'Brien
7th Edition
0134737504, 978-0134737508
