Question

Suppose you sell five August 2020 gold futures contracts one week ago, at a price of...

Suppose you sell five August 2020 gold futures contracts one week ago, at a price of $1753 per ounce. The contract size of the futures is 100 ounce. If the spot gold price is $1729 and the gold futures price is $1694 today, what is your total profit or loss from this futures contract?

12000

-29500

59000

29500

-12000
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Answer #1

No of Contracts Sold = 05

Contract Size = 100

Selling Price of Gold Future = $1753  

Current Price of Gold Future = $1694

Here Selling done at $1753 and post that price of gold depreciated. So there will be profit

Profit from Each Contract = Contract Size * ( Selling Price - Current Price ) = 100 * ( 1753 - 1694)

= 100 * 59 = 5900

Total Profit = No of Contracts * Profit from Each Contract

= 5 * 5900

= 29500

Ans : total profit from this futures contract 29,500

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