You sold one July futures contract of pork bellies at $.59 per lb.One contract represents 40,000 lbs.of pork bellies.By the end of the day, the price had fallen to $.57 per lb.What was your profit or loss for the day?

Question

Quizplus · Accepted Answer

The profit is calculated by the difference in the selling price and the closing price, multiplied by the contract size. Selling at $.59 and closing at $.57 means a $.02 per lb profit, for 40,000 lbs, equals $800 profit.

You Sold One July Futures Contract of Pork Bellies at $.59