ssume that you are a customer who opened an account with a brokerage firm. Assume today is the 15th May 2010, and you placed orders to buy 1 June Oil Futures Contracts at the newly opened DIFC Futures Exchange in Dubai which does all deals in USD. Assume each contract is equal to 1000 barrels of Oman Crude Oil. Initial Margin per contract is $ 4000 and maintenance margin is also $4000. Your broker purchased each June Futures contract at a price of $62 on the 15th May. Assume settlement price on 15th May is $62 Illustrate the marking to market process by showing the daily settlement and cumulative balances in your account, assuming the following prices prevailed on the next 5 working days and that you have not withdrawn any money. Next 5 days June Futures Contract Settlement Prices are as follows: 63, 61, 64.5, 66, 65. If you do an offset on the fifth working day at a price of $65, calculate your gain or loss?
Assume that you are a customer who opened an account with a brokerage firm. Assume today is the 15th May 2010, and you placed orders to buy 1 June Oil Futures Contracts at the newly opened DIFC Futures Exchange in Dubai which does all deals in USD. Assume each contract is equal to 1000 barrels of Oman Crude Oil. Initial Margin per contract is $ 4000 and maintenance margin is also $4000. Your broker purchased each June Futures contract at a price of $62 on the 15th May. Assume settlement price on 15th May is $62
Illustrate the marking to market process by showing the daily settlement and cumulative balances in your account, assuming the following prices prevailed on the next 5 working days and that you have not withdrawn any money.
Next 5 days June Futures Contract Settlement Prices are as follows: 63, 61, 64.5, 66, 65.
If you do an offset on the fifth working day at a price of $65, calculate your gain or loss?
DIFC OIL CONTRACTS question continued
Referring to the question in the previous page, prove that the balance in your settlement account and your cash payments into the settlement account in total are equal to the gain or loss you would have made if you bought 10 contracts at $62 each and sold them at $65 ?
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