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Soybean futures contracts are quoted in cents per bushel. Thereare 5,000 bushels per contract. The...

Soybean futures contracts are quoted in cents per bushel. There are 5,000 bushels per contract. The price lit or circuit breaker for soybeans is 60 cents. The quote for Sep. 2021 is 989'6. The prior settle was 986'4. What is the upper and lower limits for trading this contract today?

Solutions

Expert Solution

LOWER CIRCUIT 926'4 PER CONTRACT
UPPER CIRCUIT 1046'4 PER CONTRACT

CURCUITS ARE CALCULATED ON THE BASIS OF PREVIOUS SETTLEMENT

THEREFORE

LOWER CIRCUIT = PRIOR SETTLE PRICE - CIRCUIT BREAKER

= 986'4 - 60

= 926'4 PER 500 BUSHELS

UPPER CIRCUIT = PRIOR SETTLE PRICE + CIRCUIT BREAKER

= 986'4 + 60

= 1046'40 PER 500 BUSHELS


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