If you buy in March a bond future contract for 110 that matures on June 30 of the same year, and at the maturity date the same future sells for 125, you have a ________ of $________.
A) loss; 15000
B) loss; 15
C) profit; 15000
D) profit; 15

Question

Quizplus · Accepted Answer

To calculate the profit or loss in a futures contract, we need to determine the difference between the purchase price and the selling price and then multiply that difference by the tick size of the contract.

The tick size for a bond futures contract is $31.25 per tick. So, the profit or loss in this case would be:

$125 - $110 = $15 (difference in price)
$15 × $31.25 = $468.75 (profit or loss)

Since the selling price is higher than the purchase price, the trade is profitable. Therefore, choice C (profit of $15,000) is the correct answer.

If You Buy in March a Bond Future Contract for 110