Explain what is meant by open interest

Assignment Help Finance Basics
Reference no: EM132703745

Explain what is meant by open interest. Why does the open interest usually decline during the month preceding the delivery month? On a particular day, there were 2,000 trades in a particular futures contract. This means that there were 2000 buyers (going long) and 2000 sellers (going short). Of the 2,000 buyers, 1,400 were closing out positions and 600 were entering into new positions. Of the 2,000 sellers, 1,200 were closing out positions and 800 were entering into new positions. What is the impact of the day's trading on open interest?

Reference no: EM132703745

Questions Cloud

Find out the period used-periodic rate : "Complete the following using the present value formula or financial calculator. LU 19-2(2)
Calculate the company cost of equity : An analyst obtains the following information from a company's latest financial statements and other sources:
Find out the share price of the firm : What's the share price of the firm if the discount rate of 20-percent?
Differences between a job description and job specifications : What are the differences between a job description and job specifications? Why it is important to have both? In building a job description.
Explain what is meant by open interest : Explain what is meant by open interest. Why does the open interest usually decline during the month preceding the delivery month?
What is the total cash flow of the project : Pharm Co., a pharmaceutical company has successfully created a new drug. Assume that Pharm only wants to produce the drug for the next three years.
How can organization position itself to be most competitive : Are there other sources of competitive advantage for an organization? What might some of those be? How can an organization best position itself to be most.
Calculate the total value of financial distress : Simpson Ltd is a small IT company, which has 2 million shares outstanding and a share price of $20 per share. The management of Simpson plans to increase debt
What is the role of pakistan stock exchange : What is the Role of Pakistan stock exchange?

Reviews

Write a Review

Finance Basics Questions & Answers

  Examples of guidance provided for the financial advisory

Provide examples of guidance provided for the financial advisory firm / financial adviser in Australia in the preparation of a statement

  Explain the process of cross-hedging

Explain the process of cross-hedging. What are indicators of effective cross hedging?

  Find rolling average return and standard deviation

Find 10-year rolling average return, variance, and standard deviation for large company stocks. Find the monthly holding period return for S&P500 and Amazon

  What is abc optimal capital budget

Any debt over $2 million will carry a 12 percent coupon rate and be sold at par. If ABC has a marginal tax rate of 40 percent, in which projects should it invest and what is ABC's optimal capital budget?

  Island return on investment

If these are the only cash flows from this new product, what was Island's return on their investment in this product?

  Describe elements that can commonly cause uncertainty

Describe elements that can commonly cause uncertainty in the cash budget for an enterprise and the rationale for each.

  Uses the market value of equity to determine

Credit Limit. Refer to question 8. What will Mary and Marty's credit limit be if the bank uses the market value of equity to determine their credit limit and will loan them 70% of the equity?

  Types of benchmarks in financial statement analysis

What is benchmarking, and what are the two main types of benchmarks in financial statement analysis?

  Confidence interval for the proportion

Construct a 90% confidence interval for the proportion, p, of adults aged 18 or older who believe there is too little spending on national defense. Select the correct choice below and fill in any answer boxes within your choice.

  How much will you pay for traditional social security tax

How much will YOU pay for the traditional Social Security tax? How much in TOTAL is paid into the entire Social Security system on behalf of this income?

  What is the maximum possible dividend payout rate

An all-equity-financed firm plans to grow at an annual rate of at least 24%. Its return on equity is 37%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues?

  Computation of yield on bond with given data

Computation of yield on bond with given data and what is the yield on a 7-year bond for Drongo Corporation

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd