A gasoline distributor buys a gasoline futures contract to receive 42,000 gallons of gasoline at $2.94 per gallon.How is the account marked to market if gasoline futures close the next day at $2.97?

Question

Quizplus · Accepted Answer

To calculate the mark-to-market value, we need to take the difference between the initial price and the current price and multiply it by the number of gallons. 
The initial price was $2.94, and the current price is $2.97, so the difference is $0.03 per gallon. 
$0.03 per gallon x 42,000 gallons = $1,260. 
Since the price has gone up, this is a gain, so choice B is correct.

A Gasoline Distributor Buys a Gasoline Futures Contract to Receive