Assume the price of the futures contract changes

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Total value of the futures contract

You purchased the following futures contract today at the settlement price listed in the Wall Street Journal. Answer the questions below regarding the contract.

Soybean Oil (CBT) 60,000 lbs.; cents per lb.
Lifetime
Open High Low Settle Change High Low Open Interest
Oct. 15.28 15.33 15.25 15.29 -.02 20.35 15.25 7,441

(a) What is the total value of the futures contract?
(b) If there is a 10% margin requirement how much do you have to deposit?
(c) Suppose the price of the futures contract changes as shown in the following table. Enter the relevant information into the table. Show your calculations.
(d) Explain why the account is marked-to-market daily.

Day Futures Price Profit/Loss per lb. Total Value of Contract Mark-to-Market Settlement
0 $0.1529 n.a. n.a.
1 $0.1527
2 $0.1540
3 $0.1597

 

Reference no: EM1332860

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