An investor sold ten March stock index futures contracts. The multiplier on the contract is 250. At yesterday’s settlement price of 998.40 the margin balance in the account was computed as $86,450. Today the index future had a settlement price of 1000.20. The new margin amount is: A) $90,950. B) $86,000. C) $86,900. D) $81,950.
D (1000.20-998.40)*250*10=4500 Since he’s in a short position, he’s loosing out and the margin falls to: 86450-4500 = 81950
i will go for a) 1000.2-998.4 = 1.8 1.8*10 = 18 18*250 = 4500 86450 + 4500 = 90950
kevin002 you’re right. i should read questions more carefully. since he is short it will be 86450 - 4500 = 81950, so correct answer is indeed d).
Only catch was to detect the futures contract position held by the investor. Answer is so D’ish. - Dinesh S
Just to be a d&^k - If maintenance margin was 85K, the new margin account balance would be the initial margin…