Answer:
$1,875; $1,787.50; $2,837.50
$562.50
Explanation:
Initial balance in account = $1700 and 125,000 EUR is the contractual size of one EUR at a price of $1.3140
Day 1 : $1.3126
Closing price = (1.3140-1.3126)(125,000)
= $175;
Current balance = 1700 + 175
= $1,875
Day 2 : $1.3133
Closing price. = (1.3126 - 1.3133)(125,000)
= $87.50.
Current balance = 1875 - 87.50
= $1787.50 (Deduct in balance due to loss)
Day 3 : $1.3049
Closing price = (1.3133 - 1.3049)(125,000)
= $1050.
Current balance = 1787.50 + 1050
= $2837.50
Long position in future contract:
= 1700 + (1.3126 - 1.3140) + (1.3133 - 1.3126) + (1.3049 - 1.3133) × EUR 125,000
= $562.50
To bring back up to the initial performance bond level - we can experience a margin call requesting for additional funds be added to your performance bond account.
