An investor enters into a long position in 10 gold futures contracts at a futures price of $1000/oz and closes out the position at a price of $1020/oz. If one gold futures contract is for 50 ounces, what are the investor's gains or losses?
A) $100
B) $1,000
C) $5,000
D) $10,000

Question

Quizplus · Accepted Answer

The gain per contract is $1020 - $1000 = $20/oz. Since each contract is for 50 ounces, the gain per contract is $20 x 50 = $1000. The total gain for 10 contracts is $1000 x 10 = $10,000. Therefore, the investor's gain is $10,000.

An Investor Enters into a Long Position in 10 Gold