How much must beacon deposit into its margin account

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Reference no: EM131909897

At 10 a.m. on March 4 th , Beacon Capital went short 30 June crude oil futures contracts at a futures price of $60 per barrel.

The end-of-the-day settlement price on March 4 th for the June crude oil futures was $58 per barrel. On March 5 th , the market increased due to a forecast of robust oil demand.

The end-of- the-day settlement price on March 5 th for the June crude oil futures contract was $63 per barrel. Suppose the initial margin per contract for crude oil futures is $4,100 and the maintenance margin per contract is $3,500.

The contract size is 1,000 barrels.

(a) What is the mark-to-market amount for Beacon Capital at the end of trading on March 4 th ?

(b) What is the mark-to-market amount for Beacon Capital at the end of trading on March 5 th ? How much must Beacon deposit into its margin account to keep its position open?

Reference no: EM131909897

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