Question

Suppose that you enter into a short futures contract to sell July silver for $$\$ 17.20$$ per ounce. The size of the contract is 5,000 ounces. The initial margin is $$\$ 4,000$$, and the maintenance margin is $$\$ 3,000$$. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?

   Suppose that you enter into a short futures contract to sell July silver for $$\$ 17.20$$ per ounce. The size of the contract is 5,000 ounces. The initial margin is $$\$ 4,000$$, and the maintenance margin is $$\$ 3,000$$. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?

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Options, Futures, and Other Derivatives

Options, Futures, and Other Derivatives

John C. Hull 10th Edition

Chapter 2, Problem 3

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You have entered into a short futures contract to sell 5,000 ounces of silver at $17.20 per ounce. This means you are obligated to sell silver at this price in the future. Show more…

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Suppose that you enter into a short futures contract to sell July silver for $$\$ 17.20$$ per ounce. The size of the contract is 5,000 ounces. The initial margin is $$\$ 4,000$$, and the maintenance margin is $$\$ 3,000$$. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?

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