The price of KC
Wheat contract is trading at $12.00/bu. The current margin requirement is
$4,500. What is the percentage of the contract required to be posted in
margin?
Your initial margin on a
trade is $4,500 and your maintenance margin is $2,500. If your account
balance falls to $2,000, you will receive a margin call of
if the basis is -1.25
and the current futures price is 132.450, the expected cash price is:
A Nov Soybean call has a
strike price of $13.50. The underlying November futures price is $14.00.
The intrinsic value is____.
A Jul Corn call has a
strike price of $6.75. The underlying July futures price is $4.50. The
intrinsic value is _____.
A Sep Wheat call has a
strike price of $5.00. The underlying September futures price is $7.75.
The intrinsic value is___.
A Mar Soybean call has a
strike price of $15.50. The underlying March futures price is $10.89. The
intrinsic value is____.
An Aug Soybean meal put
has a strike price of $420. The underlying August futures price is $375.
The intrinsic value is ____.
if the basis is -2.75
and the current futures price is 131.525, the expected cash price is:
A Dec Wheat put has a
strike price of $4.70. The underlying December futures price is $6.20. The
intrinsic value is____.
A May Corn put has a strike price of
$4.75. The underlying May futures price is $4.50 The intrinsic value
is___.
A Sep Soybean put has a
strike price of $10.30. The underlying September futures price is $11.50.
The intrinsic value is____.
A $6.70 Dec Corn call is
selling for a premium of 35 cents. At the time, Dec Corn futures are
trading at $8.25. The time value is_____.
A $12.50 Nov Soybean put
is selling for a premium of 3 cents. Nov Soybesn futures are trading at
$13.50 The time value is____.
A Wheat call has a
strike price of $5.75. At expiration, the underlying futures price is
$6.30. The time value is____.
Jul Corn futures are
trading at $7.50. A $5.50 July corn call is trading at a premium of 60
cents. The time value is_____.
Use the following information to answer
the next four questions (17-20):
May 15: The Nov soybean price is
$6.45/bu and a producerâ€™s expected basis is - $0.30. Put options for Nov beans
are trading at 59 c/bu for the $6.75 strike price, and 59 c/bu for the $6.60
strike price. The producer is considering the following marketing strategies:
1) cash market only (no hedge), 2) hedge using futures. For each scenario
below, find the net realized price. To simplify matters, assume the producer
sells his beans to the local elevator in the 3rd week of October. Show
calculations.
Scenario 1: Oct 20: Nov futures @
$6.60/bu. Local basis is -$0.50/bu. (Use for 17 and 18)
What is the net price
using strategy 1 - no hedge?
What is the net price
using strategy 2 - futures?
Scenario 2:
Oct 20: Nov futures @ $5.90/bu. Local basis is -$0.15/bu. (Use for 19 and 20)
What is the net price
using strategy 1 - no hedge?
What is the net price
using strategy 2 - futures?
Suppose that when July
comes, the July wheat futures price is $9.55 and the cash price you
actually sell the wheat for is $9.10. The actual basis is ___________.
Use the following information to answer
the next four questions (22-25):
May 15: The Nov soybean price is
$6.75/bu and a producerâ€™s expected basis is - $0.20. Put options for Nov beans
are trading at 61 c/bu for the $6.45 strike price, and 63 c/bu for the $6.35
strike price. The producer is considering the following marketing strategies:
1) cash market only (no hedge), 2) hedge using futures. For each scenario
below, find the net realized price. To simplify matters, assume the producer
sells his beans to the local elevator in the 3rd week of October. Show
calculations.
Scenario 1: Oct 20: Nov futures @
$5.55/bu. Local basis is -$0.20/bu. (Use for 22 and 23)
What is the net price
using strategy 1 - no hedge?
What is the net price
using strategy 2 - futures?
Scenario 2: Oct 20: Nov futures @ $4.75bu. Local basis
is -$0.10/bu. (Use for 24 and 25)
What is the net price
using strategy 1 - no hedge?
What is the net price
using strategy 2 - futures?