Question

Use the following chart to complete the questions below.4 pts

WHEAT
FUTURES PRICES for Aug 1, 2019
Contract	Last	Change		Open		High		Low		Previous		Volume		Open Int
ZWY00 (Cash)	485	-5		0		485		485		490		0		0
ZWZ19 (Dec '19)	481.75	-1.25		481.75		484.25		477.5		483		36138		201637
ZWH20 (Mar '20)	488.5	-1.5		488.25		490.25		484.25		490		12925		80070
ZWK20 (May '20)	494	-0.75		493.5		494.5		489.25		494.75		3529		21796
ZWN20 (Jul '20)	498.25	0		496.75		498.5		492.75		498.25		2389		34738
ZWU20 (Sep '20)	506.5	0.5		504.75		506.5		501		506		752		7080
ZWZ20 (Dec '20)	519.5	1		516		519.75		512.75		518.5		520		8708
WHEAT
FUTURES PRICES for Tue, Sep 24th, 2019
Contract	Last	Change		Open		High		Low		Previous		Volume		Open Int
ZWY00 (Cash)	475	-5		0		475		475		480		0		0
ZWZ19 (Dec '19)	466.75	-1.25		466.75		469.25		462.5		468		36138		201637
ZWH20 (Mar '20)	476.5	-1.5		476.25		478.25		472.25		478		12925		80070
ZWK20 (May '20)	484	-0.75		483.5		484.5		479.25		484.75		3529		21796
ZWN20 (Jul '20)	478.25	0		476.75		478.5		472.75		478.25		2389		34738
ZWU20 (Sep '20)	491.5	0.5		489.75		491.5		486		491		752		7080
ZWZ20 (Dec '20)	499.5	1		496		499.75		492.75		498.5		520		8708

What would the profit/loss be if you went long in the market 10 contracts of JUL20 Wheat on Aug 1 trading at the low and offsetting your position on Sep 24 at the close of trading?

Answer 1

Buying value of Jul 20 contract on Aug 1 Low price

= Number of lot * Price * Number of qty in 1 lot

= 10 * 492.75 * 100

= 492750

Since we have purchased JUL 20 contract on Aug 1 it will be settled through Jul 20 contract only on 24 Sept 2019.

Selling value of Jul 20 contract at close

= Number of lot * Price * Number of qty in 1 lot

= 10 * 478.25 * 100

= 478250

Profit = Sales value - Purhcase value

= 478250 - 492750

= -14500

So Loss from the entire position = 14500