Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are short 23 gasoline futures contracts, established at an initial settle price of $2.365 per gallon, where each contract represents 42,000 gallons. Your initial

You are short 23 gasoline futures contracts, established at an initial settle price of $2.365 per gallon, where each contract represents 42,000 gallons. Your initial margin to establish the position is $7,675 per contract, and the maintenance margin is $6,775 per contract. Over the subsequent four trading days, gasoline settles at $2.351, $2.379, $2.404, and $2.426, respectively.

Compute the balance in your margin account at the end of each of the four trading days, and compute your total profit or loss at the end of the trading period. Assume that a margin call requires you to fund your account back to the initial margin requirement. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.)

Days Margin Account Total Profit/Loss Margin Call
Day 1 $ $ (Click to select)profitloss $
Day 2 $ $ (Click to select)lossprofit $
Day 3 $ $ (Click to select)profitloss $
Day 4 $ $ (Click to select)Profitloss $

Total (Click to select)lossprofit $

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

Applied Financial Macroeconomics And Investment Strategy

Authors: Robert T McGee

1st Edition

1137428394, 978-1137428394

More Books

Students also viewed these Finance questions