Choose the correct answer:O The trader gains $10,000.The trader loses $15,000.The trader gains $5,000.The trader loses $10,000.The trader loses $5,000. On June 1, 2023 a trader entered into a position in futures contracts to buy 200 ounces of gold inDecember 2023 for $2,000 per ounce.The December futures gold price falls during June so that the trader receives several margin callsand has to provide variation margins on her margin account, in total $5,000 by June 30.On June 30, she decides to close out her position at the then prevailing December gold futuresprice of $1,950 per once.What is the trader's total profit or loss from her trade?

Futures are derivative products and these are large quantity trades done on the margins but margins…

Answered: O The trader gains $10,000. O The…

O The trader gains $10,000. O The trader loses $15,000. O The trader gains $5,000. The trader loses $10,000. The trader loses $5,000.

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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Similar questions

You sell a 50 put for 4 and buy a 55 call for 5. Stock ends at $47. Premium=......
You sell a 50 put for 4 and buy a 55 call for 5. Stock ends at $47. Profit=...........
$80. The call premium is $6 and the put premium is $8. To keep thìngs simple, you can assume each contract allows the holder to buy or sell 13) You buy one call contract and also buy one put contract, both with the strike price of one (rather than the typical 100) share of the underlying stock. a. Compute the payoff to your option position if the stock price is $92 when the options expire. b. Compute the profit you made if the stock price is $92 when the options еxpire. c. What would happen to the value of your position if the volatility of returns for the underlying stock increases a day after you bought the call and the put? Please explain your answer for full credit. E FC MacBook Pro I A !!!
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IBM stock is currently trading at $100 per share. An investor purchases one Put option contra on IBM with a $100 strike and at a price of $3.00 per contract. Each options contract represer an interest in 100 underlying shares of stock. For each of the following scenarios determine i 7. the option is in the money, at the money, or out of the money. Show your work. A. When the option expires, IBM is trading at $98 B. When the option expires, IBM is trading at $90 C. When the option expires, IBM is trading at $97
Suppose Tyler initially pays $76,000 toward the purchase of $108,000 worth of stock, borrowing the remaining balance from one of notorious brokers, Diego. In this case, Tyler’s initial percentage margin is closest to A. 70.37%. B. 60.50%. C. 39.50%. D. 29.63%. Clear my choice
You sell a 50 put for 4. Stock ends at $47. Payoff=..
. Which of the followings is the most likely answer? Mr. Hamish paid a premium of $5 to buy a put on a stock that is currently valued at $60. The put strike price is $55. The maximum profit (including the premium) is ______ a) $0 b) $50 c) $55 d) $60
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1) Andy is bearish on USL and decides to sell short 20, 000 shares at the current market price of $120 per shar e. The initial margin is 50%. The margin account pays n o interest. Three days later, the price of USL has risen t o $130. a. What is the remaining margin in the account? b. If the maintenance margin is 30%, will Andy receive a margin call? c. Calculate the rate of return on the short position.

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