On March 1, 2005, a trader went long on wheat at $3.00/bushel (5,000 bushel contract). The position remained open until March 7th. The trader was required to post an initial margin of $3,000, and must maintain a margin of $2,000. Fill in the missing value

On March 1, 2005, a trader went long on wheat at $3.00/bushel (5,000 bushel contract). The position remained open until March 7th. The trader was required to post an initial margin of $3,000, and must maintain a margin of $2,000. Fill in the missing value

On March 1, 2005, a trader went long on wheat at $3.00/bushel (5,000 bushel contract). The position remained open until March 7th. The trader was
required to post an initial margin of $3,000, and must maintain a margin of $2,000. Fill in the missing values in the table below, given the daily settlement
prices.

Answer

Price
amount
post intial matgin
maintain a margin

Date
Settlement Price
1-Mar
$15,000.00
2-Mar
$15,150.00
3-Mar
$15,300.00
4-Mar
$14,400.00
5-Mar
$13,900.00
6-Mar
$15,000.00
7-Mar
$15,400.00

$3.00
5,000.00 contract price
$3,000.00
$2,000.00

Daily Mark to Market
Beginning Margin Balance Deposit (Withdrawal) Ending Margin Balance
$$3,000.00
$$3,000.00
$150.000
$3,150.00
$(150.00)
$3,000.00
$150.000
$3,150.00
$(150.00)
$3,150.00
$(900.000)
$2,250.00
$750.00
$2,100.00
$(500.000)
$1,600.00
$1,400.00
$2,500.00
$1,100.000
$3,600.00
$(600.00)
$4,100.00
$400.000
$4,500.00
$(1,500.00)
$3,400.00
$400.000

What is the traders profit (loss) when the position closes on March 7?
$400.00

Answer

$15,000.00


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