The following trade quotes are for futures contracts on U.S. Treasury bonds. Ope
ID: 2723165 • Letter: T
Question
The following trade quotes are for futures contracts on U.S. Treasury bonds.
Open
High
Low
Settle
Sep
98-15
99-01
98-07
98-22
Dec
98-10
98-31
98-07
98-20
Mar
98-29
98-29
98-08
98-19
Calculate your futures profit if you SOLD the December T-bond futures at the HIGH and offset your position at the end of the trading day. Assume 10 contracts. Note, a price of 98-20 = 98 and 20/32% of the face value of $100,000. Thus, 98-20 = 98.625% of $100,000 = $98,625.
$343.75
$3,437.50
$98,968.75
$98,625.00
None of the above
Open
High
Low
Settle
Sep
98-15
99-01
98-07
98-22
Dec
98-10
98-31
98-07
98-20
Mar
98-29
98-29
98-08
98-19
Explanation / Answer
Profit per contract = sale price – offset price
= 100,000 x (98 +31/32)% - 100,000 x (98 +20/32)%
=98968.75 -98625
= 343.75
Total profit = no. of contracts x profit per contract
= 343.75 x 10
= 3437.50
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