A trader sells two July futures contracts on frozen orange juice. Each contract is for the delivery of 20,000 pounds. The current futures price is 150 cents per pound, the initial margin is $5,000 per contract, and the maintenance margin is $3,000 per contract. What price change would lead to a margin
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A trader sells two July futures contracts on frozen orange juice. Each contract is for the delivery of 20,000 pounds. The current futures price is 150 cents per pound, the initial margin is $5,000 per contract, and the maintenance margin is $3,000 per contract. What price change would lead to a margin call? Under what circumstances could $8,000 be withdrawn from the margin account?
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- A trader buys two July futures contracts on frozen orange juice concentrate. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. What price change would lead to a margin call? Under what circumstances could $2,000 be withdrawn from the margin account?A company enters into a short futures contract to sell 25,000 units of a commodity for 70 cents per unit. The initial margin is $4,000 and the maintenance margin is $3,000. What is the futures price per unit above which there will be a margin call? O 76 cents O 66 cents 74 cents O 78 centsA trader bought two July futures contracts. Each contract is for the delivery of 1,000 barrels. The initial margin is $11,250 per contract and the maintenance margin is $9,000. Calculate the daily gain and loss and margin account balance from April 13, 2020 to April 15, 2020 and explain when the investor will receive a margin call and how much does he need to top up?
- Fred enters into a futures contract to buy 10,000 pounds of cotton for $8 per pound. The initial margin is 5% of contract value, and the maintenance margin is 75% of the initial margin. What price (per pound) of cotton futures will trigger a margin call? ______. What amount would Fred’s broker have to post in response to this margin call? ______.A copper futures contract requires the long trader to buy £ 25,000 of copper. The trader buys one November copper futures contract at $ 0.75 per pound. According to historical data, copper prices moved in the range of $ 0.53-0.87 per pound. The market is confident that this trend will continue in the future. What is the maximum loss this trader can have? Another trader sells one November copper futures contract. What is the maximum loss this short trader can have?Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000 ounces. The initial margin is $4,000, and the maintenance margin is $3,000.What change in the futures price will lead to a margin call?What happens if you do not meet the margin call?
- A T-note futures contract has a face value of $100,000, currently it is priced at 108’18. The initial margin is 1,620, and maintenance margin is $1,200. Jack longs one T-note futures contract and Kathy shorts one T-note futures contract. Three months later, the T-note futures contract price increase to 109’14. Who will get a margin call, by how much? Jack will get a margin call, by $875 Jack will get a margin call, by $455 Kathy will get a margin call, by $875 Kathy will get a margin call, by $455Suppose a trader opens a short position in two rice futures contracts. Each contract is for 5,000 kilograms. The initial margin is TZS 2,000,000 per contract, and the contract expires in 100 says. Suppose the future price decreases by TZS 500 per Kilogram per day for the first 10 days, then increases by TZS 750 per kilogram per day for the next 5 days. REQUIRED: Estimate the following: The initial margin to be deposited with clearing house The total gain/loss due to price decreases The total gain/loss due to price increase The balance in the trader's margin a/c after 15 daySuppose the current price for coffee for delivery in December is $1.3890 per pound. Each contract is for 37,500 pounds. Initial margin is $5000 and maintenance margin is 2700 on what day will long side get a margin call if over the next 5 days the futures price evolves as follows Day Futures Price 1. $1.4110 2. $1.4290 3. $1.3800 4. $1.3165 5. $1.3175
- Three days ago, you entered into a futures contract to sell €125,000 at $1.40 per €. Over the past three days the contract has settled at $1.32, $1.28, and $1.26. You start with $3,000. What is your total profit or loss in $ for the 3-day period?A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call? Question 1Answer a. As soon as the futures price exceeds $0.7 per unit. b. As soon as the futures price exceeds $0.8 per unit. c. As soon as the futures price exceeds $0.5 per unit. d. As soon as the futures price exceeds $0.6 per unit.Your broker requires an initial margin of $6,075 per futures contract on wheat and a maintenance margin of $4,500 per contract. Wheat futures contracts are based on 5,000 bushels and quoted in cents per bushel. You sold one wheat futures contract yesterday at the closing settlement price quote of 786. Today, the settlement quote is 808. Will you receive a margin call and if so, for what amount? All margin calls restore the margin level to its initial level. If the settlement price was 816, would your answer(s) change? If so, how?