Suppose you open a trading account with Black Hills Brokerage. Considering the producing of shale gas...

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Suppose you open a trading account with Black Hills Brokerage.Considering the producing of shale gas in U.S. you believe gasolineprices will decrease, and you establish a short position of 15gasoline futures contract. Your initial margin to establish theposition is $7,425 per contract and the maintenance margin is$6,500 per contract. Assume that a margin call requires you to fundyour account back to the initial margin requirement.
How much margin you should put up for your futures tradingaccount? What is the initial value of your position?
Over the subsequent four trading days, gasoline settles at$2.071, $2.099, $2.118, and $2.146, respectively. Compute thebalance in your margin account at the end of each of the fourtrading days. What happen to your margin account?
Compute your total profit or loss at the end of the tradingperiod.
What is your percentage return?

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Answer a since the number of contracts is 15 and the margin per contract is 7425 so the total margin required to open the trading account is 742515 111375 The initial value of the position is Zero any futures contract has an initial See Answer

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Suppose you open a trading account with Black Hills Brokerage.Considering the producing of shale gas in U.S. you believe gasolineprices will decrease, and you establish a short position of 15gasoline futures contract. Your initial margin to establish theposition is $7,425 per contract and the maintenance margin is$6,500 per contract. Assume that a margin call requires you to fundyour account back to the initial margin requirement.How much margin you should put up for your futures tradingaccount? What is the initial value of your position?Over the subsequent four trading days, gasoline settles at$2.071, $2.099, $2.118, and $2.146, respectively. Compute thebalance in your margin account at the end of each of the fourtrading days. What happen to your margin account?Compute your total profit or loss at the end of the tradingperiod.What is your percentage return?