In: Finance
Use the following corn futures quotes:
Corn 5,000 bushels | ||||||
Contract Month | Open | High | Low | Settle | Chg | Open Int |
Mar | 455.125 | 457.000 | 451.750 | 452.000 | −2.750 | 597,913 |
May | 467.000 | 468.000 | 463.000 | 463.250 | −2.750 | 137,547 |
July | 477.000 | 477.500 | 472.500 | 473.000 | −2.000 | 153,164 |
Sep | 475.000 | 475.500 | 471.750 | 472.250 | −2.000 | 29,258 |
Suppose you buy 27 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 464.125, and you close out your position. Calculate your dollar profit on this investment. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
We have bought One Future Contract of Corn 5,000 bushels at the Rate of 472.250 Which is Last Settle price of September 27 (Assuming Expiry of Sep end on 27th Sep.).
Therefore Purhase Cost i.e. Acquisition cost = 472.250*5,000 = 2,361,250
After one month when price is 464.125 we close out the position.
Therefore Inflow (Contract Value of Sales) = 464.125*5,000 = 2,320,625
Dollar Profit on Investment Will be (Sales-Purchase) = (40625)