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The ?big? S&P stock index futures contract trades only ?in the pit,?

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The ?big? S&P stock index futures contract trades only ?in the pit,? whereas the ?E-mini? S&P contract trades only electronically. The E-mini contract is worth 1/5 of the value of the ?big? contract.;a. Recently, the E-mini contract closed at 2065. What was the total value represented by one E-mini S&P contract as of the day of that close?;b. If you think the S&P index is likely to go up in the near future, would you buy or sell an E-mini futures contract?;c. Based on the margin requirements given at;http://insigniafutures.com/futures-education-resources/margins.html;how much initial margin would you have to put up to buy or sell 1 contract?;d. Assume that in two weeks, the contract closes at 2000. What would be your profit or loss, given the action you answered for part b?;e. Assume now that the trade went against you, i.e., the price of the contract goes down instead of up. At what contract price would you have gotten a margin call? How much additional margin will you need to deposit in your account?;Additional Requirements;Level of Detail: Show all work

 

Paper#21418 | Written in 18-Jul-2015

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