Future And Options Of Business And Finance (Case Study Sample)
The goal of this assignment is for you to understand the trading of futures. Here are the key points we are trying to understand with this assignment:
- Leverage: the relatively small amount of money that is required to establish and hold a position in a futures contract.
- Margin: You have as much fake money as you need to carry out whatever strategy. You will have to tell me how much you would have to place in a brokerage account to support your initial margin.
- Daily Margin: It’s important to calculate the daily margin changes and perhaps add to your account if it falls below the maintenance margin.
- How the Futures price changes with respect to the spot price.
- Trading Instructions: understanding the language of trading is important, so when you are giving me, your trader, instructions it has to be in the proper terms and use the correct ticker symbols.
For week one you must select a futures contract and decide how many contracts you are going to buy or sell. To help establish the sizing you must come up with a narrative – what your organization is and why you are using futures. NO CRYPTOCURRENCIES.
Trading: Each week you will have the opportunity to trade 3 times. After you establish your original position you do not have to trade. I limit trades so you are not doing day trading.
You will email me any trades and I will maintain my own spreadsheet and calculate margin changes.
You will have to maintain a daily record of futures price changes and the change on the margin. If the margin amount drops below maintenance, you must email me and tell me that you’ve deposited more fake money in the account.source..
Future and Options BUSFIN
In futures contracts, the prices are determined on a daily basis on the market, choosing position. The initial position for Ryan Faul is 122.421875 and for Trevor Roessler it is 351.25. To hold the contacts at small margins, there is focus on the daily minimum and the required position. This decreases the risk of exposure while considering the liquidity and market depth, which affect the margins. Nonetheless, there are speculative limits to the future options depend on the hedging transactions.
The margin deposit of the futures contact ensures that the traders honor the contractual obligations, and at the onset the value is zero to the buyer and seller as there is no exchange. Maintaining the minimum balance (maintenance margin) is prioritized and this involves cash rather than security. The margin is debited or credited on a daily basis, depending on price behavior on that day. When there is failure to meet the margin call, the position is not liquidated, but rather there is focus on recouping the resulting prices. Generally, in futures contract, there is renegotiation of the future price, and while this is not possible in the exercise there is commitment to purchase the futures at the previous day
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