On April 1, you sold one S&P 500 Index futures contract at a futures price of 1,550. If, on June 15, the futures price was 1,612, what would be your profit (loss) if you closed your position (without considering transactions costs)?
A) $1,550 loss
B) $15,550 loss
C) $15,550 profit
D) $1,550 profit

Question

Quizplus · Accepted Answer

The profit or loss from a futures contract is calculated by taking the difference between the selling price and the buying price, then multiplying by the contract multiplier (which is typically $250 for S&P 500 Index futures). In this case, the selling price was 1,550 and the buying (closing) price was 1,612, resulting in a loss of 62 points. Multiplying 62 by $250 gives a loss of $15,550.

On April 1, You Sold One S&P 500 Index Futures