Overall monetary gain or loss for this investment

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Reference no: EM13763850

One day (i.e. Day 0), you opened a long position on a current month stock futures contract on Stock Y at a settlement price of $35.50. The contract multiplier was 1,000. The initial margin and the maintenance margin for the contract were $6,400 and $5,120 respectively. The settlement price of Stock Y stock futures contract was closed at the following level on each of the days afterwards: Day 1: $34.50; Day 2: $34.00; Day 3: $33.25; Day 4: $36.50. Assume margin has to be put up immediately once position is opened or if called. Ignore transaction levies.

a) What would be your margin account balance at the close of each day from Day 0 to Day 4?

b) If you offset your position at the close of Day 4, what would be your overall monetary gain or loss for this investment?

Reference no: EM13763850

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