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28
You sell one December futures contracts when the futures price is $1,010 per unit. Each contract is on 100 units and the initial margin per contract that you provide is $2,000. The maintenance margin per contract is $1,500. During the next day the futures price rises to $1,012 per unit. What is the balance of your margin account at the end of the day?
A.$1,800
B.$3,300
C.$2,200
D.$3,700
A.$1,800
B.$3,300
C.$2,200
D.$3,700
Answer: B
The price has increased by $2. Because you have a short position you lose 2×100 or $200. The balance in the margin account therefore goes down from $3,500 to $3,300.
The price has increased by $2. Because you have a short position you lose 2×100 or $200. The balance in the margin account therefore goes down from $3,500 to $3,300.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015