Question

Consider the following sequence of prices for a currency futures contract. Each contact involves 10,000 units of the foreign currency. The initial and maintenance margin requirements are USD 800 and USD 500, respectively. Assume that the position was entered at a price of 1.62 and that the futures contract is held to expiration, which is in day 6
         Day         Futures             Price
1          1.65
2          1.66
3          1.64
4          1.63
5          1.61
6          1.60
Calculate the margin account balances on day 3 for the short.

Answer 1

Solution

Given that