A week ago a trader bought one December gold futures contract (size = 100 ounces) at $1,300/oz. The gold futures contracts are traded on the New York Mercantile Exchange. The initial margin requirement is $12,000. Ignore margin calls or maintenance margin in the following calculations.
(1) Suppose that today the trader closed out the position at $1,340/oz. How much is the amount of profit/loss, and how much is the rate of return on the investment?
(2) Suppose that today the trader closed out the position at $1,250/oz. How much is the amount of profit/loss, and how much is the rate of return on the investment?
2. A trader enters into one December crude oil futures contract to sell 1,000 barrels at $50/barrel. The initial margin requirement is $12,000 and the maintenance margin is $8,000. What price change will lead to a margin call? Please explain.