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Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold...

Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table.

Day

Settlement Price

0

1340.30

1

1345.50

2

1339.20

3

1330.60

4

1327.70

5

1337.70

6

1340.60

Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day.   

c.       What is your total profit after you closed out your position?     

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AMSwer Considering gren data; Number Mari per cdntract - Snital Maintenaneo oarg in Der con tract bere fore Numbea dnitial mo

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