Calculate how many emini sp 500 futures contracts

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Reference no: EM132602489

Mr. X currently holds 20,000 shares of a certain stock. The stock is currently trading at: $98.00 per share.

He is interested in hedging against short-term movements in the market and decides to use eMini S&P 500 futures to hedge his exposure. The Index is currently at: 3315 Contract size = $50 times index.

Beta of the Stock = 0.85. Calculate how many eMini S&P 500 futures contracts are needed to hedge the portfolio against downside price risk. Discuss your results.

Reference no: EM132602489

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