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You purchased 2 Soybean Oil futures contracts today at the settlement price (labeled as “Settle”) listed...

You purchased 2 Soybean Oil futures contracts today at the settlement price (labeled as “Settle”) listed as following. Soybean Oil (CBT) 60,000 lbs.; cents per lb. Lifetime Open High Low Settle Change High Low Open Interest Oct. 15.28 15.33 15.25 15.29 -.02 20.35 15.25 7,441 Part I. If there is a 10% initial margin requirement on total value of underlyings, how much do you have to deposit? Maintenance margin requirement is $600 for each contract. In what situation will you receive a margin call from your broker?

Solutions

Expert Solution

1.
=2*60000*15.29/100*10%=1834.8000

2.
Margin call occurs when Loss of 317.40 (=1834.8000/2-600) per contract

Loss of 317.40 means fall in price of soyabean per lb=317.40/60000=0.0053=0.53 cents per lb.

So, if new soyabean price is 15.29-0.53=14.7600 margin call occurs

jeff jeffy answered 2 years ago
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