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  • Commodities Market Assignment

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    harsha faraiyya
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    The document contains calculations related to options contracts and futures contracts. For options, it shows the profit or loss at different settlement prices. It determines there would be a profit entering a 3-month futures contract on a stock priced at 50, and calculates the potential profit. For another contract, it calculates the maximum loss if the stock price is 3000. For a futures contract on a bond priced at 900, it also determines there would be a profit.

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    The document contains calculations related to options contracts and futures contracts. For options, it shows the profit or loss at different settlement prices. It determines there would be a profit entering a 3-month futures contract on a stock priced at 50, and calculates the potential profit. For another contract, it calculates the maximum loss if the stock price is 3000. For a futures contract on a bond priced at 900, it also determines there would be a profit.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    16 views1 page

    Commodities Market Assignment

    Uploaded by

    harsha faraiyya
    The document contains calculations related to options contracts and futures contracts. For options, it shows the profit or loss at different settlement prices. It determines there would be a profit entering a 3-month futures contract on a stock priced at 50, and calculates the potential profit. For another contract, it calculates the maximum loss if the stock price is 3000. For a futures contract on a bond priced at 900, it also determines there would be a profit.

    Copyright:

    © All Rights Reserved
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    of 1

    Pay off on settlement

    @ 790 = Profit of 1000, sol. (800-790)*100


    @810= Loss of 1000, sol. (800-810)*100
    @820= Loss of 2000, sol. (800-820)*100
    @830= Loss of 3000, sol. (800-830)*100
    @840= Loss of 4000, sol. (800-840)*100
    @850= Loss of 5000, sol. (800-850)*100
    @860= Loss of 6000, sol. (800-860)*100
    @870= Loss of 7000, sol. (800-870)*100

    Yes should enter into the three months future contract


    F= S*er*t
    F= 50*2.7180.05*0.25
    F= 50.62
    Therefore, 52>50.62= Profit
    Profit= 52-50.62= 1.38/share

    If Market Price is 2400, then Net payoff= (2400-3000) + (2900-2400)-143.8= -243.8


    2600, Net payoff= (2600-3000) + (2900-2600)-143.8= -243.8
    2800, Net payoff= (2800-3000) + (2900-2800)-143.8= -156.2
    3000 , Net payoff= (3000-3000) -143.8= -143.8
    3200 , Net payoff= (3200-3000)-143.8= 56.2
    3400, Net payoff= (3400-3000)-143.8= 265.2
    3600, Net payoff= (3600-3000)-143.8= 456.2
    3800, Net payoff= (3800-3000)-143.8= 656.2

    Therefore
    3000+143.8 = 3143.8
    For 100 Shares= 314380
    Max Loss= Stock Price+ Put Premium- Put Strike
    = 3000+(143.8-2900)= 243.8
    For 100 Shares= 243.8*100= 24380

    Yes should enter into the three months future contract


    F= S*er*t
    F= 900*2.7180.06*0.33
    F= 918
    Therefore, 935>918= Profit
    Profit= 935-918= 18/bond

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