23. You are given the following data for the wheat futures market: SeaHi SeaLow

Question

23. You are given the following data for the wheat futures market: SeaHi SeaLow High Low Settle Chg. Opint WHEAT 15,000 bu minimum; dollars per bushel 4.39 2.53 May 3.15 3.07 3.10-.05 15,959 4.35 2.55 Jul 3.30 3.13 4.40 2.52 Sep 3.25 3.19 4.51 2.89 Dec 3.37 3.20 4.54 3.30 Mar 3.38 3.36 3.36 .,05 .04 36,634 05 57,788 ,06 42,278 131 Est. sales 33,000. Mon.'s sales 60,000. Mon.'s open int 62,280, up 402 you bought 3000 December futures contracts when they were at their highest price of the year and today you sold them at their closing price. Ignoring interest and brokerage fees, what was your profit or loss (specify which it is) [5] A) determine the total value of wheat futures contracts traded today by making the simplifying assumption that all trading occurred at the closing price of the busiest futures contract (5) B)

Explanation / Answer

Assuming that trading occured at closing price of busiest futures contract that is Sep futures = $3.20

Value of wheat futures traded today = estmated sales x units/contracts x average price/unit

= 33000 x 5000 x 3.20 = 528,000,000 = $ 528M

Value of wheat futures traded today = $ 528M

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