Suppose the initial margin on heating oil futures is $6,750, the maintenance margin is $5,000 per contract, and you establish a long position of 10 contracts today, where each contract represents 42,000 gallons. Tomorrow, the contract settles down $0.03 from the previous day's price. Are you subject to a margin call?
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Suppose the initial margin on heating oil futures is solve this question Accounting question
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- Suppose the initial margin on heating oil futures is $20, 200, the maintenance margin is S 16, 500 per contract, and you establish a long position of 12 contracts today, where each contract represents 27,000 gallons. Tomorrow, the contract settles down 5.07 from the previous day's price. What is the maximum price decline on the contract that you can sustain without getting a margin call?You are in a situation where the initial margin on heating oil futures is $8,400, the maintenance margin is $7,200 per contract, and you establish a long position of 10 contracts on this day. Each contract covers 42,000 gallons. If the contract settles down $.04 from yesterday’s close, are you going to get a margin call? What is the maximum price decline that can be sustained before a margin call is issued?An investor buys 5 future contracts on gold at the MCX.Each contract is for 100 gms. The contract price is Rs 30550 per10 gms. The tick size is Re 1. The initial margin is 4% while minimum margin is 90% of the initial margin. a. What is the minimum change in the value of the contract? b. What is the initial margin? C. At what price level the investor will have a margin call?
- Suppose that your company is planning to sell 1.25 million litres of fuel in two years. Thecurrent price of fuel is £1.60 per litre. a) Suppose there is a two-year heating oil futures contract available. The futuresprice is £1.63 per litre. How many contracts would you need to fully eliminate yourrisk exposure over the next two years? How many contracts would you need ifyour optimal hedging ratio was 0.75? What position in these contracts would youtake today? Explain. b) Evaluate the outcomes of your hedging strategy if the price of fuel in two years is(1) £1.72 per litre, and (2) £1.58 per litre. In each case assume the heating oilfutures price to be equal to that of the fuel. Comment on your results.Suppose the DJIA stands at 24,200. You want to set up a long straddle by purchasing 100 calls and an equal number of puts on the index, both of which expire in three months and have a strike of 242. The put price is listed at $4.25 and the call sells for $5.25. a. What will it cost you to set up the straddle, and how much profit (or loss) do you stand to make if the market falls by 650 points by the expiration dates on the options? What if it goes up by 650 points by expiration? What if it stays at 24,200? b. Repeat part a, but this time assume that you set up a short straddle by selling/writing 100 Oct 242 puts and calls. c. What do you think of the use of option straddles as an investment strategy? What are the risks, and what are the rewards? a. To set up the long straddle, it will cost (Round to the nearest dollar. Enter a positive number for the cost.) If the market on the long straddle falls by 650 points by the expiration dates on the options, the profit (or loss) is $ (Round to…Consider a hypothetical futures contract where the current price is $ 212. The initial margin requirement is $ 10 and the maintenance margin requirement is $ 8. You enter into long 20 contracts and meet all margin requirements, but do not withdraw any excess margin. B. Complete the table below and explain all deposited funds. Suppose the contract was purchased at the settlement price of that day, so there is no gain or loss at current market prices on the day of purchase. C. What is your total profit or loss by the end of Day 6?
- A 49.what is the total net gin of loss on this transaction?A short forward contract on a commodity that was negotiated some time ago will expire in 9 months and has a delivery price of $58. The current spot price of the commodity is $58. The risk-free interest rate (with continuous compounding) is 4.1%. What is the value of the short forward contract?
- Suppose you enter into a short 6-month forward position at a forward price of $100. What is the payoff in 6 month for the underlying prices of $150 QUESTION 4 Suppose you enter into a long 6-month forward position at a forward price of $50. What is the payoff in 6 month for the underlying prices of $50If the risk-free rate is 4%, market risk premium is 6% and you are interested in a cocoa futures contract with beta of cocoa being -0.291, What is the required annual rate of return on the cocoa contract ? You plan to hold the contract for 3 months only, and take its delivery. At that time you expect the spot price of cocoa will be $900 per ton. What is the present value of this three-month deferred claim ? What should be the proper price of this contract ?Suppose 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