You have decided to speculate that the price of crude oil


You have decided to speculate that the price of crude oil will rise. You have entered into a position of 4 contacts of Light Sweet Crude Oil (1,000 barrels per contract, trades in dollars and cents per contract) at a price of $58.25. The initial margin for the contact is $2,500 and the maintenance margin is $2,200. If the equity in your account was $15,000 when you entered the position, at what price would you get a margin call? If the price of contract falls to $56.08, would you get a margin call. If so how much will the call be for?

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Financial Management: You have decided to speculate that the price of crude oil
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