You sell one December futures contracts when the futures price is $1,010 per unit. Each contract is on 100 units and the initial margin per contract that you provide is $2,000. The maintenance margin per contract is $1,500. During the next day the futures price rises to $1,012 per unit. What is the balance of your margin account at the end of the day

balance in the margin account therefore goes down from $2,000 to $1,800

Explanation:

given data

contract  = 100 units

futures price = $1,010 per unit

initial margin = $2000

maintenance margin = $1500

futures price rises =  $1,012 per unit

solution

we get here by short sold the futures contract so profit when price goes up  is

loss = $1,012 - $1,010 = 2 per unit

short position loss is  = 2 × 100 = 200

Margin account balance at the end of the day = Initial margin - loss due to increase    1

Margin account balance  = $2000 - $200 = $1800

so balance in the margin account therefore goes down from $2,000 to $1,800

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