9. You are short 25 gasoline futures contracts, established at an initial settle

Question

9.

You are short 25 gasoline futures contracts, established at an initial settle price of $2.57 per gallon, where each contract represents 42,000 gallons. Over the subsequent four trading days, gasoline settles at $2.53, $2.54, $2.56, and $2.64, respectively.

  

Calculate the profit or loss for each trading day. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)

Compute your total profit or loss at the end of the trading period. (Do not round intermediate calculations. Input your answer as a positive value.)

  

You are short 25 gasoline futures contracts, established at an initial settle price of $2.57 per gallon, where each contract represents 42,000 gallons. Over the subsequent four trading days, gasoline settles at $2.53, $2.54, $2.56, and $2.64, respectively.

Explanation / Answer

Number of gallons shorted = 42000*25 = 1050000

Total loss = 73500 loss

Profit /loss 1 2.57-2.53 = .04 * 1050000 42000 2 2.53 -2.54 = - .01 *1050000 - 10500 3 2.54-2.56 = - .02 *1050000 - 21000 4 2.56 -2.64 =- .08 *1050000 - 84000

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