Assume today’s settlement price on a CME EUR futures contract is $1.30/€. The contract is written on €125,000 and you have a long position in one contract. The initial performance bond is $6,500, and the maintenance performance bond is $4,000.
a. On day 1, the settlement price became $1.27/€, what is your performance bond account balance at end of day 1? Are you subjected to margin call? If yes, how much additional funds do you need to deposit in order to keep your position?
b. On day 2, the settlement price became $1.31/€, what is your performance bond account balance at end of day 1? Are you subjected to margin call? If yes, how much additional funds do you need to deposit in order to keep your position?
c. On day 3, the settlement price became $1.32/€, you decide to close your position. What is your total gain or loss?