Purchase Solution

Futures Contract- Marking to Market

Not what you're looking for?

Ask Custom Question

You are long 10 gold futures contracts, established at an initial price of $480 per ounce, where each contract represents 100 ounces. Over the subsequent four trading days, gold settles at $473, $479, $482, and $486 respectively. Compute the cash flows at the end of each trading day, and compute your total profit or loss at the end of the trading period.

Purchase this Solution
Solution Summary

Cash flows as a result of marking to market of gold futures contracts have been computed.

Solution Preview

Please see the attached file:
You are long 10 gold futures contracts, established at an initial price of $480 per ounce, where each contract represents 100 ounces. Over the subsequent four trading days, gold settles at $473, $479, $482, and $486 respectively. Compute the cash flows at the end of each trading ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Margin account

    81066 Margin account: If you have a long position in one futures contract, the changes in the margin account from daily marking to market will result in a balance of the margin account after the third day to be: Today's settlement price for Mercantile

  • Future Price

    Ignoring marking to market, what should be the futures price for the futures contract on Russell Index Corp maturing in three months? The stock of Russell Index Corporation is currently selling for $530.88 per share.

  • Options & Futures

    If the agreement is represented by a futures contract marking to market on a daily basis as the price changes, what is your cash flow at the end of the business on the next day?

  • Hedging, Futures Contracts, and Margin to Market

    Since both parties have to post margin when they enter into a futures contract and because they mark to market every day until the delivery date, we are assured the party and the counterparty to the contract have already posted the gain or loss to the

  • Futures Contracts

    "Marking to market is the process of adjusting the investor's account in order to reflect the change in the settlement price of the futures contract.

  • Financial Market Lecture Reaction

    The only way to get rid of your obligation as the holder of a futures contract is to sell your contract in the market in which you bought it. If you hold it at maturity, you will be asked to perform.

  • Futures, options, currencies, hedges, exchange rate risk

    Forward Contract Futures Contract Options Contract  Forward Forward Buy Sell Purchase Purchase Purchase Sale Futures Futures Calls Puts Georgetown Co. plans to purchase Japanese goods denominated in yen. 

  • total value of the futures contract

    Day Futures Price Profit/Loss per lb. Total Value of Contract Mark-to-Market Settlement 0 $0.1529 n.a. n.a. 1 $0.1527 2 $0.1540 3 $0.1597 Please see attached file. (a) What is the total value of the futures contract?

  • Futures and Options Contracts

    Options Contract: A contract to buy or sell at strike price: written on 100 shares Gold would be best contracted with futures as it is stable and a futures option would ensure the commodity was assigned to the futures contract holder.

View More Related Solutions