A trader takes an initial LONG position on seven (7) April 2022 Live Cattle (LEJ22] futures contracts. The contract specifies 40,000 pounds and the price is cents per pound (or dollars per hundredweight). The CME requires an initial margin of $1,540 per contract and a maintenance margin of $1,400 per contract. The trader holds this position until Feb 1 when they fully offset the trade. Position Date Trade or Close Price ($/cwt) Price Change (S/cwt) Position [Contract] Value Change (total $) Mark-to- Market Margin Call Balance Amount Ending Margin Balance
A trader takes an initial LONG position on seven (7) April 2022 Live Cattle (LEJ22] futures contracts. The contract specifies 40,000 pounds and the price is cents per pound (or dollars per hundredweight). The CME requires an initial margin of $1,540 per contract and a maintenance margin of $1,400 per contract. The trader holds this position until Feb 1 when they fully offset the trade. Position Date Trade or Close Price ($/cwt) Price Change (S/cwt) Position [Contract] Value Change (total $) Mark-to- Market Margin Call Balance Amount Ending Margin Balance
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Complete the following table of a trader's margin account. Limited partial credit provided.
A trader takes an initial LONG position on seven (7) April 2022 Live Cattle (LEJ22] futures
contracts. The contract specifies 40,000 pounds and the price is cents per pound (or dollars per
hundredweight). The CME requires an initial margin of $1,540 per contract and a maintenance
margin of $1,400 per contract. The trader holds this position until Feb 1 when they fully offset
the trade.
Position
(Contract)
Value
Trade or
Close Price
(8/ewt)
Mark-to-
Market
Ending
Margin
Balance
Price
Margin Call
Change
(S/ewt)
Change
(total $)
Balance
Amount
Position
Date
Long
1/26/22
$142.000
1/26/22 $141,900
1/27/22
$141.625
1/28/22
$143.100
1/31/22 $144.525
Offset All
2/1/22
$145.375
[note: you should be able to copy/paste this table into a spreadsheet)
Determine the profit or loss from this trade.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6afcccb7-5a08-4035-af9c-fb913bf85d41%2F58c98ca8-a90d-4722-bb63-da63ae139f52%2Ff2b8j49_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Complete the following table of a trader's margin account. Limited partial credit provided.
A trader takes an initial LONG position on seven (7) April 2022 Live Cattle (LEJ22] futures
contracts. The contract specifies 40,000 pounds and the price is cents per pound (or dollars per
hundredweight). The CME requires an initial margin of $1,540 per contract and a maintenance
margin of $1,400 per contract. The trader holds this position until Feb 1 when they fully offset
the trade.
Position
(Contract)
Value
Trade or
Close Price
(8/ewt)
Mark-to-
Market
Ending
Margin
Balance
Price
Margin Call
Change
(S/ewt)
Change
(total $)
Balance
Amount
Position
Date
Long
1/26/22
$142.000
1/26/22 $141,900
1/27/22
$141.625
1/28/22
$143.100
1/31/22 $144.525
Offset All
2/1/22
$145.375
[note: you should be able to copy/paste this table into a spreadsheet)
Determine the profit or loss from this trade.
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