Suppose that the July gold futures prices declined $5 by today's close.The holder of a short position in two contracts (contract size = 100 oz. ):

Question

Quizplus · Accepted Answer

The holder of a short position benefits when prices decline. Since each contract is for 100 oz and the price declined by $5, the profit per contract is 100 oz * $5 = $500. With two contracts, the total profit is $500 * 2 = $1,000. This profit is added to the margin account, hence the correct answer is that the margin account will increase by $1,000 today.

Suppose That the July Gold Futures Prices Declined $5 by Today's