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You short 5 contracts of ZC corn futures. Recall that corn futures are quoted in US cents ($0.01) per bushel, and each contract is
You short 5 contracts of ZC corn futures. Recall that corn futures are quoted in US cents ($0.01) per bushel, and each contract is on 5,000 bushels. (For reference, a bushel is 35.2391 liters of volume.) Your broker specifies initial margin of $3,000 per contract, and a maintenance margin of $2,500 per contract. You short 5 contracts at a price of 516.00 (cents per bushel). The first day's settlement price is 530.00. The second day's settlement price is 523.00. On the third day, you close out at 518.00. (a) what happens to your margin account (assume you never take cash out of your margin account until closing your position): Time Open Day 1 Settlement Day 2 Settlement Close Price 516.00 Gain Margin Margin Call Margin After Call (b) The Gain column is the gain to your margin account since the previous time, Margin is how much is in your account after adjusting for the gain, Margin Call is the amount of a margin call (if any), and Margin After Call is the amount in your margin account after any margin call (if any). What is the total gain from your trading?
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