Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tsingshan sold 200,000 ton March 2023 contracts at price of $20 per kilo. The Initial Margin was $20,000 per contract. On March 8,2022 price of

image text in transcribed

Tsingshan sold 200,000 ton March 2023 contracts at price of $20 per kilo. The Initial Margin was $20,000 per contract. On March 8,2022 price of Nickel went suddenly up $100 per kilogram . Q. 3.1 What is the margin call to Tsingshan? Will there be any damage to Tsingshan's booking broker if Tsingshan cannot pay the margin call Q.3.2 Data: XYZ shorts 200,000 Ton of Nickel on March 1 at $20,000 per ton Below are Nickel prices for 2/22; and 3/1/223/9/22 Calculate the margin calls on every day between March 2 through March 7 and sum them up. By end of March 8 trading a new margin call arrives(How much?) and XYZ cannot meet it- its position is liquidated at $100,000 per ton and company is destroyed, although it would be viable if it could survive till March 9 . How can it be? Q. 3.3 Use data from Q. 3.2 to explain the Situation Tsingshan was involved in Tsingshan sold 200,000 ton March 2023 contracts at price of $20 per kilo. The Initial Margin was $20,000 per contract. On March 8,2022 price of Nickel went suddenly up $100 per kilogram . Q. 3.1 What is the margin call to Tsingshan? Will there be any damage to Tsingshan's booking broker if Tsingshan cannot pay the margin call Q.3.2 Data: XYZ shorts 200,000 Ton of Nickel on March 1 at $20,000 per ton Below are Nickel prices for 2/22; and 3/1/223/9/22 Calculate the margin calls on every day between March 2 through March 7 and sum them up. By end of March 8 trading a new margin call arrives(How much?) and XYZ cannot meet it- its position is liquidated at $100,000 per ton and company is destroyed, although it would be viable if it could survive till March 9 . How can it be? Q. 3.3 Use data from Q. 3.2 to explain the Situation Tsingshan was involved in

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Course On Financial Mathematics

Authors: M V Tretyakov

1st Edition

1908977388, 978-1908977380

More Books

Students also viewed these Finance questions

Question

Distinguish between filtering and interpreting. (Objective 2)

Answered: 1 week ago