What was the settle price for July 2022 natural gas futures on this date? If you held 40 contracts, what is the total dollar value of your futures position?
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(Assuming the settle price is $3.50 per MMBtu for this example.) Show more…
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Part 1 Select the correct statement of the futures contract based on the Bloomberg screen below: The contract size is 50,000 pounds and the minimum price fluctuation per contract is $500. The buyer needs to pay $62,475 in May 2019 when they buy this contract. The price of this commodity is $12.5 per pound. This futures contract will be delivered in May 2020. Part 2 A power producing company wants to purchase a natural gas futures contract. It will use the natural gas to generate electricity. The company’s underlying position in natural gas is short, so its futures position should be short. Part 3 What’s the expected futures price for gold based on the information below? Spot price: $1,500 per troy ounce Secured storage cost: $250 per troy ounce Insurance cost: $300 per troy ounce Convenience benefit: $400 per troy ounce $1,850 per troy ounce Part 4 Which of the following is NOT an option for the commodity buyer near the end of a futures contract? Rolling over the contract to another future-dated futures contract Preparing to accept physical delivery Choosing not to exercise the contract Preparing to exchange gains or losses in case
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