You speculate in the market by selling 8 gold futures contracts when the futures price is $556.60 per ounce. The price on the contract maturity date is $557.20. What is your total proﬁt (loss) if the
Contract size is 100 ounces?

Question

Quizplus · Accepted Answer

When you sell futures contracts, you are essentially betting that the price of gold will decrease. However, in this case, the price actually increased from $556.60 to $557.20.

To calculate the loss, we need to find the difference between the selling price and the buying price, and then multiply it by the contract size:

Loss = (Buy Price - Sell Price) x Contract Size
Loss = ($557.20 - $556.60) x 100
Loss = $60

However, since you sold the contracts (betting that the price would decrease), your loss is actually negative. Therefore, your total loss is -$60.

You Speculate in the Market by Selling 8 Gold Futures