You are short of 6 Dec eurodollar futures contracts at 98.10. Yesterday, the closing price was 98.15. Todays closing price is 97.905. What variation margin will be due?
A) You will have to pay USD 612.50
B) You will receive USD 612.50
C) You will have to pay USD 3,675.00
D) You will receive USD 3,675.00

Question

Quizplus · Accepted Answer

The change in price from 98.15 to 97.905 is a decrease of 0.245. Since you are short, you gain from a price decrease. The gain per contract is 0.245 * $25 = $6.125. For 6 contracts, the total gain is 6 * $6.125 = $3,675.00, so you will receive this amount.

You Are Short of 6 Dec Eurodollar Futures Contracts at 98.10