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Today is June. Suppose you buy a futures contract for 42,000 gallons of RBOB gasoline delivered...

Today is June. Suppose you buy a futures contract for 42,000 gallons of RBOB gasoline delivered in December. The contract settles at $1.50 per gallon today. You decide to exit in August, when the contract settles at $1.45 per gallon. Calculate your payoff from holding the position between June and August

-2,100

60,900

2,100

-63,000

0 0
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Answer #1

Since I had gone long on the contract and it has gone down in value, I would be having a loss. The value of the loss will be = (1.5 - 1.45) x 42000 = 2100 (Loss)

Hence, option A (-2100) is correct.

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