You are short 20 gasoline futures contracts, established at an initial settle pr

Question

You are short 20 gasoline futures contracts, established at an initial settle price of $2.47 per gallon, where each contract represents 42,000 gallons. Over the subsequent four trading days, gasoline settles at $2.46, $2.51, $2.52, and $2.53, 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.)

Profit/Loss

Day 1 $

Day 2 $

Day 3 $

Day 4 $

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.) $

Explanation / Answer

As he has shorted he will make money when the price is below $2.47

Price per gallon at end of day1

$0.1*42000*20= 84000

Hence total lgain =$84000

As price increase on day 2 by $0.4 therefore

=336000

Hence loss woudl be $336000

loss of days

3=0.5*42000*20 = 420000

Loss would bewould be

=0.6*42000*20=504000

Now at end of trading period loss would be 504000 because he does not square off positions

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