Mr. Berry is an oil consumer. He would like to secure the price for his...
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Finance
Mr. Berry is an oil consumer. He would like to secure the price for his future oil needs. He decides to buy oil future contract at SAFEX. Details of the futures contract are as follows:
Details
Date of contract
1 November
Futures contract price
R 800 per barrel
Size of contract
3 contracts at 1 barrel per contract
Close-out date/maturity date
3 November
The Initial margin
R 500 per contract
The Maintenance margin
R 400 per contract
The following market prices are recorded per barrel :
1 November R 1000
2 November R 1300
3 November R 900
Required: Prepare the mark-to-market account for Mr. Berry. Clearly show the balance in the margin account at the end of each of the three trading days.
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