You are long 10 gold futures contracts, established at an initial settle price o

Question

You are long 10 gold futures contracts, established at an initial settle price of $1,500 per ounce, where each contract represents 100 ounces. Over the subsequent four trading days, gold settles at $1,504, $1,501, $1,511, and $1,515, 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. (Input your answer as a positive value. Do not round intermediate calculations.)

  

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

Explanation / Answer

1 contract = 100 ounces

10 contracts = 1000 ounces

Futures are marked to market

Therefore,                                                          (amount in $)

Day

Exercise price

Traded price

Total profit/loss

Profit/loss per day

Profit/loss for 10 contracts

1

1,500

1,504

4

4

4 * 1,000 = 4,000

2

1,500

1,501

1

(3)

3 * 1,000 = (3,000)

3

1,500

1,511

11

10

10 * 1,000 = 10,000

4

1,500

1,515

15

4

4 * 1,000 = 4,000

Day

Exercise price

Traded price

Total profit/loss

Profit/loss per day

Profit/loss for 10 contracts

1

1,500

1,504

4

4

4 * 1,000 = 4,000

2

1,500

1,501

1

(3)

3 * 1,000 = (3,000)

3

1,500

1,511

11

10

10 * 1,000 = 10,000

4

1,500

1,515

15

4

4 * 1,000 = 4,000

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