You speculate in the market by selling 15 gold futures contracts when the futures price is $648.50 per ounce. The price on the contract maturity date is $662.60. What is your total proﬁt or loss if the
Contract size is 100 ounces?

Question

Quizplus · Accepted Answer

To calculate profit or loss, we need to know the difference between the selling price and the maturity date price.

Selling price for 15 contracts = 15 x 100 x $648.50 = $973,250 
Maturity price for 15 contracts = 15 x 100 x $662.60 = $993,900

Profit or Loss = Maturity price - Selling price 
= $993,900 - $973,250 
= $20,650

However, since we sold the contracts, our profit or loss is negative. 
Profit or Loss = $20,650 x -1 
= -$20,650

Therefore, the total profit or loss if the contract size is 100 ounces is -$21,150.00, which is option A.

You Speculate in the Market by Selling 15 Gold Futures