00:01
To calculate the gain or loss on a short future contract, we need to consider the difference between the initial future price and final future price, right? so, what are the given conditions are initial future price is given to us which is equals to initial future price which is 50 cents per pound, right? 50 cents per pound.
00:28
Now, final future price is given to us which is 48 .20 cents per pound.
00:33
Now, contract size is 50 ,000 pounds, right? so, now change in price would be initial future price minus final future price, right? so, this will be this is basically the trader is short on the contract, contract, right? which means that they have sold the future contract at the initial price and will buy it back at the final price, right? so, that is why therefore you can say that the change in price would be there.
01:10
So, initial future price was 50 cents per pound and final future price is basically 48 .20 because he had like bought it at lesser price after selling it, right? so, now what is the change in the price? change in the price would be 1 .8 cents per pound, right? so, now it becomes very simple.
01:36
We need to calculate the gain or loss, gain or loss we don't know whatever is there, right? so, gain or loss is given by change in price multiplied by contract size.
01:47
So, what is the contract size? it was 50 ,000 pounds and the change in price was 1 .80 cents per pound...