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Problem #5: Open Interest Referring to Figure 14.1, what is the total open interest on the June 2012 Japanese yen contract? Does it represent long positions, short positions, or both? Based on the settle price on the contract, what is the dollar value of the open interest? The total open interest on the June 2012 Japanese Yen is 140,864 contracts This is the number of contracts. Each contract has a long and a short, so the open interest represents either the number of long positions or the number of short positions. Each contract calls for the delivery of 2,500,000 The settle price on the contract is S1.2589 per 100 yen Price per contract = $1.2589 / 100 x ¥12,500,000 = $157,362.50 140,864 contracts, the total dollar value is about (# of contracts x price) $22,166,711,200.

Explanation / Answer

Solution: a. Australian Dollars contracts 61 b. Both Notes: Open interest represents both long & short positions as for every long contract there will be a corresponding short position. c. Dollar value of open interest =                                 5,844,410 Working Notes: Each contract calls for delivery of AUD 100,000 The settle price on contract is $0.9581 per AUD 1 Price per contract = ($0.9581 /AUD 1) x AUD 100,000 =$95,810 Therefore for 61 contract Dollar value of open interest = 61 x $95,810 =$5,844,410 Please feel free to ask if anything about above solution in comment section of the question.

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