Final answer:
Selling a Jul KC Wht contract at $8.30 and the contract settling at $8.40 results in a $0.10 per bushel loss to the seller's margin account. If the standard contract size is 5,000 bushels, the total loss is $500, excluding any commission fees or transaction costs.
Step-by-step explanation:
When you sold the Jul KC Wht contract on March 1 for $8.30, and the contract settled at $8.40 on March 2, there is a loss to your margin account due to the increase in the settlement price. This is because as a seller, you have an obligation to sell at the contract price of $8.30, but the market has moved to $8.40, which is $0.10 higher.
The result is that your margin account will be debited $0.10 for each contract unit that you sold. If we assume the contract size is 5,000 bushels, which is standard for a wheat futures contract, the total loss would be $0.10 multiplied by 5,000, resulting in a $500 adjustment to your margin account. This does not take into consideration any commission fees or transaction costs your company may charge.
When selling a Jul KC Wht contract, you receive a profit if the contract settles at a higher price than the price you sold it for. In this case, you sold the contract for $8.30 and it settled at $8.40. To calculate the result to your margin account, you need to determine the difference between the selling price and the settlement price multiplied by the contract size. Let's assume the contract size is 100 bushels. The result to your margin account would be:
($8.30 - $8.40) x 100 = -$10.
Therefore, the result to your margin account would be a loss of $10.