Identify the type of trading represented

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Question 1: Explain in words and identify the type of trading represented by "+57/52 May".

Question 2: Relative to the prices quoted for New Orleans, what is the likely bid by an elevator in or near Kansas City to farmers who would deliver wheat immediately? (Explain your answer.)

Question 3: On February 5, 1990, what was the likely settlement price for the July '90 contract, the first new-crop futures contract? (Explain you answer.)

Question 4: As of April 5, 1990, two months later, the Kansas City May '90 wheat futures contract had fallen to 367.25, while the Gulf bid was "April .....+67/59 May".

Consider an elevator in Kansas City that on February 5 sold for arrival in the Gulf the second half of April. What, if any, cash has the firm paid out or received by April 5? By April 5 will the firm have been happy or regretful that it had not waited to sell its wheat? (Explain your answer.)

Question 5: On February 5, 1990, the May '90 370 call closed at 10.40 cents per bushel. On April 5, what was its likely price? (Explain your reasoning, emphasizing the price change, if any, from February 5 and using the vocabulary of options.)

Reference no: EM133496110

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