Total value represented by one e-mini

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The "big" S&P stock index futures contract trades only "in the pit," whereas the "E-mini" S&P contract trades only electronically. The E-mini contract is worth 1/5 of the value of the "big" contract.

a. Recently, the E-mini contract closed at 2065. What was the total value represented by one E-mini S&P contract as of the day of that close?

b. If you think the S&P index is likely to go up in the near future, would you buy or sell an E-mini futures contract?

c. Based on the margin requirements given at:

https://insigniafutures.com/futures-education-resources/margins.html

how much initial margin would you have to put up to buy or sell 1 contract?

d. Assume that in two weeks, the contract closes at 2000. What would be your profit or loss, given the action you answered for part b?

e. Assume now that the trade went against you, i.e., the price of the contract goes down instead of up. At what contract price would you have gotten a margin call? How much additional margin will you need to deposit in your account?

Reference no: EM13926946

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