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# Futures Question (Soybeans and the CBOT)

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I am working on setting up the following problem and would appreciate receiving assistance:

The futures contract quote on 5,000 bushels of soybeans traded on the CBOT, Monday, December 31, 2001 was:
Open: 423-3/4 (\$4.2375/bushel)
High: 424 (\$4.24/bushel)
Low: 419-1/2 (\$4.1950/bushel)
Settle: 421 (\$4.21/bushel)

You shorted 3 contracts at \$4.22 on December 31, 2001

The settlement for January 2, 2002 was \$4.18 (the markets closed on New Years). If you had to post a \$1,000 initial margin per contract upon placing the trade, what would be your trade account balance at the close of January 2, 2002?

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#### Solution Preview

Loss per bushel = 4.22-4.18 = 0.04
Total Dollar loss = .04 * 5,000 * 3 ...

#### Solution Summary

The solution provides an excellent response to the question being asked. It goes into a considerable amount of detail and explains the concepts being asked very well.

\$2.19