Plutonium is trading at a one-year futures price of $5,000 per gram. A futures contract comprises 100 grams. The initial margin is $100,000 and the maintenance margin is $80,000. You are short one futures contract. There is a margin call when the price per gram of plutonium changes to
A) $4,750
B) $4,900
C) $5,100
D) $5,250

Question

Quizplus · Accepted Answer

A margin call occurs when the price increases to $5,250 per gram, causing a loss of $25,000 (100 grams x $250), reducing the margin below the maintenance level of $80,000.

Plutonium Is Trading at a One-Year Futures Price of $5,000