Hypothetical futures contract

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Consider a hypothetical futures contract in which the current price is $212. The initial margin requirement is $10, and the maintenance requirement is $8. You go long 20 contracts and meet all margin calls but do not withdraw any excess margin.

a. When should there be a margin call?

b. Complete the table below and explain any funds deposited. Assume that the contract is purchased at the settlement price of that day so there is no mark-to-market profit or loss on the day of purchase. Day Beginning Balance Funds Deposited Futures Price Price Change Gain/Loss Ending Balance 0 212 1 211 2 214 3 209 4 210 5 204 6 202

c. How much are your total gains or losses by the end of Day 6?

Reference no: EM131591156

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