Question

You purchased five May wheat (CBT) futures contracts at the low today. What is your total profit or loss on these contracts at the end of day?

Open High Low Settle Chg Open Interest

Wheat (CBT) – 5,000 bu.; cent per bu.

May 819.50 823.25 797.25 810.25 -6.75 200,452

Answer 1

The total profit on the five May wheat (CBT) futures contracts purchased at the low today and sold at the settle price is $3,250.

Step-by-step explanation:

To determine the total profit or loss on the five May wheat (CBT) futures contracts purchased at the low today, we must calculate the difference between the purchase price and the settle price, then multiply by the number of contracts and the contract size.

The purchase price (low of the day) was 797.25 cents per bushel, and the settle price was 810.25 cents per bushel. Each contract represents 5,000 bushels, and you have five contracts, so the total profit or loss can be calculated as:

((Settle Price - Purchase Price) x Contract Size) x Number of Contracts

= ((810.25 - 797.25) x 5,000) x 5

= (13 x 5,000) x 5

= 65,000 cents, or $650 per contract

For all five contracts, the total profit is 5 x $650 = $3,250.