Suppose you bought stock index futures contr for 200 and, Ask an Expert

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suppose you bought stock index futures contr for 200 and were required to put up initial m of $10,000. The value of the contract is 200tim the $500 multiple or $100,000. On the next three days, the contract's settlement price was at levels: day 1.205; day 2, 197: day 190.

a. Calculate the value of your margin account on each day.

b. If the maintenance margin for the contract is $7,000 how much variation margin did the exchange require you to put up at the end of the third day?

c. If you had failed to put up that much, what would the exchange have done?

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Financial Management, Finance

Category:- Financial Management
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