Consider the following information about the CMX gold futurescontract:
(a) Contract size: 100 troy ounce
Initial margin: $1,013 per contract
Maintenance margin: $750 per contract
Minimum tick size: 10 cents/troy ounce ($10/contract)
There are four traders, A, B, C, and D in the market when nextyeariÌs June contract commences trading. (Kolb Ch3)
(a) Complete the following table showing the open interest forthe contract.
Date | Buyer | Seller | Contracts | Price | Open Interest |
July 6 | A | B | 5 | $294.50 | |
July 6 | C | B | 10 | $294.00 | |
July 6 | Settlement Price | $294.00 | |
July 7 | D | A | 10 | $293.50 | |
July 7 | B | D | 5 | $293.80 | |
July 7 | Settlement Price | $293.80 | |
July 8 | B | A | 7 | $293.70 | |
July 8 | Settlement Price | $299.50 | |
(b) Calculate the gains and losses for Trader A. Assume that atthe time of each change in position, Trader A must bring the marginback to the initial margin account. Compute the amount in TraderAiÌs margin account at the end of each trading day. Will Trader Aget a margin call? If so, when and how much additional margin mustbe posted?
