Homework Answers
Refer the watched picture for the table.
First calculating the contact size. On day 2 long position holder gets a marginal call of 4300. The per unit loss of long position holder is = 3298.3 - 3315.5 = - $ 17.2 per unit
Let n be the contract size
Gain /Loss = - 17.2 × n
=> - 4300 = -17.2n
=> n = 4300/17.2 = 250 units
Contract size = 250 units
In short position the margin account balance on last day that is on the day he deposits variance margin is $ 36,300.
Initial margin = $ 36,300
Long position
| D | SP | G/L | M | VM |
|---|---|---|---|---|
| 1 | 3315.5 | - | $ 36,300 | - |
| 2 | 3298.3 | (3298.3-3315.5)×250 = - 4300 | 32,000 | $ 4300 |
| 2 | 3298.3 | - | $ 36,300 | - |
| 3 | 3318.8 | (3318.8-3298.3)×250 = 5125 | 41425 | - |
| 4 | 3336.1 | (3336.1-3318.8)×250 = 4325 | 47,750 | - |
Short position
| D | SP | G/L | M | VM |
|---|---|---|---|---|
| 1 | 3315.5 | - | $ 36,300 | - |
| 2 | 3298.3 | (3315.5-3298.3)×250 = 4300 | 40,600 | - |
| 3 | 3318.8 | (3298.3-3318.8)×250 = - 5125 | 35,475 | - |
| 4 | 3336.1 | (3318.8 -3336.1)×250 = -4325 | 31,150 | $ 5150 |
| 4 | 3336.1 | - | $ 36,300 | - |
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