Calculate profit or loss on February

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Question - On November 15, 2019, Mary believes that the share market will suffer a correction (fall) of 20% in late February. It is November 15, 2019 and the ASX 200 index stands at 6780. If Mary commonly speculates using 5 SPI 200 contracts;

i) Outline the position she should take to profit from her expectations.

ii) Calculate her profit or loss on February 28th, 2012 for this position if the bid and ask quotations for March 2020 SPI 200 contracts are quoted at 6582.0 and 6584.0 respectively.

iii) Outline the action she should take to realise this profit or loss.

Use the quotations from the ASX table above, while assuming that all futures trades are conducted using market orders, and document her various actions in the table below. Recall that SPI futures are valued at $25 times the index.

Reference no: EM132895429

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