Trading in the 90-day bank-accepted bill contract
On Tuesday 3 April 2018, you will be required to enter into four June 2018 90-day bank accepted bill contracts. You may enter into these contracts as a buyer or as a seller. Whether you enter into these contracts as a buyer or a seller will depend on your expectations as to the likely direction of short-term interest rates. Again, you should state a logical basis for entering into these contracts as a buyer or seller. For example, you might speculate that short-term interest rates are likely to rise or fall. Note that again the basis of your speculation is of lesser importance here than is demonstrating that you understand fully the nature of the transactions that you enter into. Using the closing price of the June 2018 90-day bank accepted bill contract on Tuesday 3 April 2018, detail your financial position after you have entered into these four contracts. You should ignore margin calls but you should include in your discussion the deposit that you were required to provide. On Monday 7 May 2018, you must close out your position and do so at the closing price of the June 2018 90-day bank accepted bill contract. Provide a full report of the profit or loss that you made and explain why this occurred.
Note: opening price on 03/04/18 according to ASX is 98.100 closing price on 03/04/18 according to ASX is 98.071 on 07/05/18 closing price is 98.040