You sold one silver future contract at $3 per ounce.What would be your profit (loss)at maturity if the silver spot price at that time is $4.10 per ounce? Assume the contract size is 5,000 ounces and there are no transactions costs.

Question

Quizplus · Accepted Answer

The profit (loss) is calculated as the difference between the selling price and the spot price at maturity, multiplied by the contract size. 
Profit (loss) = (Spot price at maturity - Selling price) * Contract size
Profit (loss) = ($4.10 - $3) * 5,000
Profit (loss) = $1.10 * 5,000
Profit (loss) = -$5,500 (loss)

You Sold One Silver Future Contract at $3 Per Ounce