Suppose you sell nine September silver futures contracts at the last price of the day as shown in the table below.What will be your profit or loss on this contract if the price turns out to be $12.09 per ounce at expiration?
Futures:
Silver - 5,000 troy oz,U.S.cents per troy oz. $$\begin{array} { | l | l | l | l | l | l | l | l | }
\hline & \text { OPEN } & \text { HIGH } & \text { LOW } & \text { SETTLE } & \text { CHG } & \begin{array} { l }
\text { LIFETMME } \
\text { HIGH }
\end{array} & \begin{array} { l }
\text { LIFETMME } \
\text { LOW }
\end{array} \
\hline \text { July } & 1163.0 & 1163.0 & 1135.5 & 1140.5 & - 7.0 & 1520.0 & 475.0 \
\hline \text { Sept } & 1154.5 & 1174.5 & 1137.0 & 1152.5 & - 7.0 & 1518.0 & 689.3 \
\hline
\end{array}$$
A)loss of $25,425
B)loss of $7,050
C)loss of $3,025
D)profit of $3,025
E)profit of $25,425

Question

Suppose you sell nine September silver futures contracts at the last price of the day as shown in the table below.What will be your profit or loss on this contract if the price turns out to be $12.09 per ounce at expiration?
Futures:
Silver - 5,000 troy oz,U.S.cents per troy oz. $$\begin{array} { | l | l | l | l | l | l | l | l | } 
\hline & \text { OPEN } & \text { HIGH } & \text { LOW } & \text { SETTLE } & \text { CHG } & \begin{array} { l } 
\text { LIFETMME } \
\text { HIGH }
\end{array} & \begin{array} { l } 
\text { LIFETMME } \
\text { LOW }
\end{array} \
\hline \text { July } & 1163.0 & 1163.0 & 1135.5 & 1140.5 & - 7.0 & 1520.0 & 475.0 \
\hline \text { Sept } & 1154.5 & 1174.5 & 1137.0 & 1152.5 & - 7.0 & 1518.0 & 689.3 \
\hline
\end{array}$$
A)loss of $25,425
B)loss of $7,050
C)loss of $3,025
D)profit of $3,025
E)profit of $25,425

Quizplus · Accepted Answer

Since you sold contracts, you have a short position and thus incur a loss when the price rises.Profit = 9 × 5,000 × ($11.525 - $12.09) = -$25,425 (loss)

Suppose You Sell Nine September Silver Futures Contracts at the Last