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Yesterday, you entered into a futures contract to buy €62,500 at $1.50 per €. Your initial...

Yesterday, you entered into a futures contract to buy €62,500 at $1.50 per €. Your initial performance bond is $1,500 and your maintenance level is $500. Suppose the futures price closes today at $1.48. What is your gain/loss from the futures contract today? Should you deposit additional funds into your performance bond account in order to maintain this futures contract?

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Answer #1
In case we want to buy exchange rate and thus the decrease in exchange rate would result in loss for buyer
Loss from future contract (Closing price today-Contract price)*Value of future contract
Loss from future contract (1.48-1.50)*62500
Loss from future contract -$1,250
Thus, loss from future contract today is 1,250
The performance bond balance would fall to $250 due to loss (1500-1250) which is below the maintenance level of $500
Thus, addditional funds will have to be deposited in the performance bond account
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