If you took a short position in three S&P 500 futures contracts at a price of 900 and closed the position when the index futures was 885, you incurred
A)a gain of $11,250.
B)a loss of $11,250.
C)a loss of $8,000.
D)a gain of $8,000.

Question

Quizplus · Accepted Answer

When you take a short position and the price decreases, you profit from the difference. Each S&P 500 futures contract represents $250 times the index. The difference between the opening and closing prices is 15 points (900 - 885). For three contracts, the gain is 15 points * $250 * 3 = $11,250.

If You Took a Short Position in Three S&P 500