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(Solved): An investor takes a long position in one December Coffee futures contracts at noon on June 3 - ...



An investor takes a long position in one December Coffee futures contracts at noon on June 3

--Contract size is 37,500 lb and futures price is $1.80/lb

--Initial margin is $6,750/contract (10% of the contract value)

--Maintenance margin is $5,000/contract

How far could the price decline before the investor gets a margin call?



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Given,
Contract size   Futures price  /lb Initial margin  /contract Maintenance margin  /contract

Calculate the contract value:

Contract value    Contract size    Futures price
Contract value  /lb
Contract value  


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