A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15000 pounds. The current futures price is 250 cents per pound, the initial margin is $10000 per contract, and the maintenance margin is $8000 per contract. What price change would lead to a margin call? Under what eircumstances could $5000 be withdrawn from the margin account?

A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15000 pounds. The current futures price is 250 cents per pound, the initial margin is $10000 per contract, and the maintenance margin is $8000 per contract. What price change would lead to a margin call? Under what eircumstances could $5000 be withdrawn from the margin account?

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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An investor enters into a long oil futures contract when the futures price is $18.0 per barrel. The contract size if 100 barrels of oil. How much does the investor gain or lose if the oil price at the end of the contract equals $16.75?
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A 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?
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M2
Jon establishes a long position of one T-bond future today for a settlement price of 101'02. The exchange requires an initial margin of $2700 and a maintenance margin of $2500. Below are the next two days closing price on this contract. Day 1: settlement price100'31 Day 2: settlement price 99'30 The margin account balance after two days is Numeric Response dollars
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