Question

Explain how the clearinghouse would record the following:

Mr. A buys a September wheat futures contract from Ms. B for $4 .00/bu. on July 20.

Mr. D buys a September wheat futures contract from Mr. E for $3 .95 on July 25.

Ms. B buys a September wheat futures contract from Mr. D for $4 .01 on July 30.

Mr. E buys a September wheat futures contract from Mr. A for $4.06 on August 3.

Show the clearinghouse’s payments and receipts needed to close each position.

Answer 1

For Transaction 1:

	Transaction date	Mr. A's Demat A/C	Mr. A's Trading A/c	Ms. B's Demat A/C	Ms B's Trading A/C
Transaction 1	20-Jul	Credit September Wheat Future	Debit $4 .00/bu.	Debit September Wheat Future	Credit $4 .00/bu.

For Transaction 2:

	Transaction date	Mr. D's Demat A/C	Mr. D's Trading A/c	Mr. E's Demat A/C	Mr. E's Trading A/C
Transaction 2	25-Jul	Credit September Wheat Future	Debit $3.95	Debit September Wheat Future	Credit $3.95

For transaction 3:

	Transaction date	Ms. B's Demat A/C	Ms. B's Trading A/c	Mr. D's Demat A/C	Mr. D's Trading A/C
Transaction 3	30-Jul	Credit September Wheat Future	Debit $4.01	Debit September Wheat Future	Credit $4.01

For transaction 4:

	Transaction date	Ms. E's Demat A/C	Mr. E's Trading A/c	Mr. A's Demat A/C	Mr. A's Trading A/C
Transaction 4	3-Aug	Credit September Wheat Future	Debit $4.06	Debit September Wheat Future	Credit $4.06

For each of the transaction clearing need the following documents:

Buyer's Cash Debit Record

Buyer's Commodity Credit Record

Seller's Cash Credit Record

Seller's Commodity Debit Record