It is now 15th June 2020, you are bullish on the gold price for the next 6 months and willing to speculate by using $197,000 to take the appropriate position in 6-month futures contract. The current spot price and December futures price of gold are $1,950 and $1,975 per ounce, respectively. Each contract is on 100 ounces of gold. The required initial margin is $9,850 per contract. The maintenance margin per contract is $7,350. At the end of the first day of trading, the futures contract settles at $1,990 per ounce. What is the balance of your margin account at the end of that day? $227,000 $197,000 None of the other answers O $167,000 $195,500
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- Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table. Day Settlement Price 0 1340.30 1 1345.50 2 1339.20 3 1330.60 4 1327.70 5 1337.70 6 1340.60 Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day. a. What are the initial margin and maintenance margin on your margin account?Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table. Day Settlement Price 0 1340.30 1 1345.50 2 1339.20 3 1330.60 4 1327.70 5 1337.70 6 1340.60 Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day. b. Fill the appropriate numbers in the blank cells in the following table. (Hint: See solution to Q19 in Lesson 2 Learning…Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table. Day Settlement Price 0 1340.30 1 1345.50 2 1339.20 3 1330.60 4 1327.70 5 1337.70 6 1340.60 Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day. c. What is your total profit after you closed out your position?
- Today I enter a long position of 500 ounces in GCZ22 at the futures price of $1,850 per ounce. By June of 2022, my inflation concern comes to fruition, and the price of the GCZ22 contract increased to $2,000 per ounce. I decide to monetize half of my position; I sell 250 ounces of GCZ22. I hold the remainder until settlement in December 2022. The inflation worry subsides, and the contract settles at $1,800 per ounce. How much profit/loss do I have in total?The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $2,000 per ounce. What is your dollar profit/loss if platinum sells for $2,050 a troy ounce when the futures contract expires? What's the answer?? a- Loss 1,250,000 b- Profit 1,250,000 C-Loss 2,500 d- Profit 2,500Consider a three-month futures contract on gold. The fixed charge is Rs.310 per deposit and thevariable storage costs are Rs.52.5 per week. Assume that the storage costs are paid at the timeof deposit. Assume further that the spot gold price is Rs.15000 per 10 grams and the risk-freerate is 7% per annum. What would the price of three month gold futures if the delivery unit is onekg? Assume that 3 months are equal to 13 weeks
- The futures price of gold is $800. Futures contracts are for 100 ounces of gold, and the margin requirement is $4,000 a contract. The maintenance market requirement is $1,200. You expect the price of gold to rise and enter into a contract to buy gold. How much must you initially remit? Round your answer to the nearest dollar. $ If the futures price of gold rises to $855, what is the profit and return on your position? Round your answer for profit to the nearest dollar and for return to the nearest whole number. Profit: $ Return: % If the futures price of gold declines to $784, what is the loss on the position? Round your answer to the nearest dollar. Enter the answer as a positive value. $ If the futures price declines to $756, what must you do? Round your answer to the nearest dollar. Enter the answer as a positive value. The investor will have to $ to restore the initial $4,000 margin. If the futures price continues to decline to $740, how much do you have in your…Last week, you sold a futures contract on 5,000 troy ounces of silver at a settle price of S 23.10. Today, you made delivery and the daily settle price was $23.15. What amount will you receive at the time of delivery? Assume yesterday's settle price was $23.19.Suppose that it is january 15 now. A copper fabricator knows it will require 100,000 pounds of copper on May 15 to meet a certain contract. So he takes a long position in the future contract. At that time the spot price of copper is 140 cents per pound and the May futures price is 120 cents per pound. Each contract is for the delivery of 25,000 pounds of copper. If the cost of copper on May 15 is 125 cents per pound, what is the effective price this copper fabricator pays per pound? a. Around 125 cents b. Around 105 cents c. Around 140 cents d. Around 120 cents e. Around 115 cents
- A gold futures contract requires the long trader to buy 100 troy ounces of gold. The initial margin requirement is $ 2,000 and the support margin requirement is $ 1,500. Matthew Evans enters long June gold futures contract at $ 320 per troy ounce. When could Evans receive a support margin call?you entered a one-year long forward contract on FOJC in April 2023 when the forward price was US 286 cents per pound. Each contract is also for delivery of 15,000 pounds. After one month (t=1 month) the price of the forward concentrate was US 293 cents per pound. Assuming a risk-free rate of 5% with continuously compounding, what is the value of the forward contract after one month?The spot price of gold today is $1, 507 per troy ounce, and the futures price for a contract maturing in seven months is $1, 548 per troy ounce. If Golddy Plc puts on a futures hedge today and lifts the hedge after five months. a) Calculate the cost of carry for gold. b) If the spot price of gold in five months' time turns out to be $1,520. What will be the futures price five months from now? c) How much is the basis in five months' time?