NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Clearing and Settlement System
A trader buys 2 lots of a stock futures contract (lot size 500) at Rs 400 on day 1. The day 1 settlement price is Rs 410 and the day 2 settlement price is Rs 395. What is the cumulative MTM amount on day 2 after the day 1 MTM was settled, i.e. the day 2 MTM alone?
The day 2 MTM is a loss of Rs 15,000. The position of 1,000 units is revalued from the previous settlement price of Rs 410 to Rs 395, a fall of Rs 15 per unit, and day 2 MTM is measured from the prior day's settlement price.
- ALoss of Rs 15,000Correct
- BProfit of Rs 10,000
- CLoss of Rs 5,000
- DLoss of Rs 25,000
Explanation
Quantity = 2 x 500 = 1,000 units. Day 2 MTM = (395 - 410) x 1,000 = -Rs 15,000, a loss. Rs 10,000 is the day 1 profit, and the net since purchase is -Rs 5,000 (a distractor), but the question asks day 2 alone.
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