A trader buys four September futures contracts on orange juice when the futures price is 160...
A trader buys four September futures contracts on orange juice when the futures price is 160 cents per lb. of orange juice Each contract is for the delivery of 15,000 lbs of the orange juice. How much does the trader lose or gain if the orange juice price at the end of the contract is 145 cents per pound?
Homework Answers
Answer:
Future contract price Fp=160 cents/lbs
Number of Contract N=4
Quantity in each contract L=15000 lbs
Price at end of contract P=145cents/lbs
Since price at end of contract is less than purchase price of contract so trader will have losses and lose amount =(160-145)*4*15000=$9000
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Table 23.1:
Sample Wall Street Journal Futures Price Quotations TABLE 23.1 Metal &Petroleum Futures Contract Op en...
Please, show clear work if you need thumbs up, be sure the
answer is right, if the answer is incorrect you will get thumbs
down.
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