# Futures Q's

A trader buys a Eurodollar Futures contract (\$1 million face value) @ 98.14 and closes it out @ 98.27. On this contract the trader has: a.) lost \$325 b.) gained \$325 c.) Lost \$1300 d.) gained \$1300 In the futures market, a contract does not trade for two days because trades are not permitted at the equilibrium price. The market for this contract is: a.) limit up b.) suspended c.) limit down d.) locked limit

D D

close thunder, its C D

C (because the closing price is higher that the price at the beginning) D

nice strange

Why not D when trader buys @ 98.14 and sells @ 98.27. I am confused.

I totally don’t get it. Strange can you please explain it ? Since, he is long increase in price will get him gains. That is how the calculations for margin and variation margin are done. What is that I am missing here ??

#1 is B. ED futures is \$2500/point 0.13*2500 = \$325. oops

thunderanalyst Wrote: ------------------------------------------------------- > I totally don’t get it. Strange can you please > explain it ? Since, he is long increase in price > will get him gains. That is how the calculations > for margin and variation margin are done. > > What is that I am missing here ?? NOthing - you gain money when price goes up and you are long the futures contract - every contract in the world

I got what Joey got. Now i am confused.

JoeyDVivre Wrote: ------------------------------------------------------- > #1 is B. > > ED futures is \$2500/point 0.13*2500 = \$325. > > oops where did you get 2500?

Just remember 1 basis point change worth \$25. It’s 13 basis point change (27-13). The buyer gains 325. B

\$1,000,000*1/4year * 1% = \$2500

oh. thanks.

Eurodollar is 90 days, 90/360

Key information to remember is that Eurodollar quotes are based on 90-day LIBOR. So actual change is (98.27 - 98.14) x 90/360 = 0.0325% >>> 0.0325% x 1,000,000 = 325 (gain) Quick and dirty way to do this is remember that each tick (0.01%) in Eurodollar futures (or any T-bill futures) is worth \$25 dollars. (13 x 25 = 325)

Damn you all for front-running while I came up with an eloquent response

Thanks for the quick and dirty way nirjaina, I remember that is the books now.

sorry the answers are b d im off my game today guys