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Analysis of E-mini S&P 500 Futures Contracts: Value, Strategy, and Margin Requirements

Investigating futures trading strategies and margin considerations.

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    Analysis of E-mini S&P 500 Futures Contracts: Value, Strategy, and Margin Requirements, page 1Analysis of E-mini S&P 500 Futures Contracts: Value, Strategy, and MarginRequirementsPart aWhat is the value of one E-mini S&P contract if the closing price of the E-mini S&P 500 is$2065?Value of One E-mini S&P contract is 50 times the value ofclosing price of E-mini S&P 500Closing price = $ 2065Value of One E-mini S&P contract = 50 * 2065 = $ 103250Part bWhy would an investor buy an S&P 500 futures contract if they expect the S&P 500 to go up inthe near future?If S&P 500 is expect go up in near future we should look tobuyfutures contract of S&P 500,because as prices will go up in future we canbuyour contract at predetermined fixed price whichhas more probability of being lower than future spot price because they are expected to go up infuture.Part cWhat are the initial margin and maintenance margin requirements for buying or selling one E-mini S&P contract?Initial margin required to buy or sell 1 E-mini contract as per the given website is = $ 5060Maintenance margin = $ 4600Part dHow do you calculate the loss incurred when closing a futures contract if the predetermined priceis higher than the current market price?Closing price = $ 2000As we have sold the futures contract as per our strategy in part b. We will incur loss because wehave to close our contract by buying at predetermined future price of $ 2065 which higher thancurrent price of $ 2000.

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    Analysis of E-mini S&P 500 Futures Contracts: Value, Strategy, and Margin Requirements, page 2

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