Financial DerivativesTU Board 2024
You enter into a long futures position in 1 contract in gold at a futures price of Rs 8,400,000 per kg. You purchased one kg gold futures. The contract size is 1 kg. The broker requires Rs 200,000…
5You enter into a long futures position in 1 contract in gold at a futures price of Rs 8,400,000 per kg. You purchased one kg gold futures. The contract size is 1 kg. The broker requires Rs 200,000 initial margin deposit per contract and a maintenance margin is 150,000 per contract. Day12345Settlement price (Rs)8,380,0008,304,0008,300,0008,650,0008,350,000 Calculate the daily gain or loss, cumulative gain or loss, margin balance and margin call if any. Determine the price level that would trigger a margin call. If investor does not deposit margin call amount, what will happen?
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