An oat futures contract is for 5,000 bushels and the price can change by as much as 20 cents in either direction per trading day. If the margin requirement is $800 per contract, the maximum gain or loss in one day is
A) plus or minus 25%.
B) plus or minus 125%.
C) plus or minus 1.25%.
D) plus or minus 80%.

Question

Quizplus · Accepted Answer

The maximum change in value for one day is 5,000 bushels * $0.20/bushel = $1,000. Since the margin requirement is $800, the maximum one-day gain or loss as a percentage of the margin is $1,000 / $800 = 125%.

An Oat Futures Contract Is for 5,000 Bushels and the Price