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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Forwards and Futures

A trader buys 2 lots of Nifty futures at 22,000, with a lot size of 50. The day's settlement price is 22,060. The next day's settlement price is 21,990. What is the cumulative MTM position at the end of the second day?

The cumulative position is a loss of Rs 1,000. The long position of 100 units entered at 22,000 now stands at 21,990, so the net change is minus 10 points times 100 units, even though day one showed a Rs 6,000 gain.

  1. AProfit of Rs 3,000
  2. BLoss of Rs 1,000
  3. CProfit of Rs 1,000Correct
  4. DLoss of Rs 3,000

Explanation

Quantity = 2 × 50 = 100. Day 1 profit = (22,060 − 22,000) × 100 = Rs 6,000. Day 2 loss = (21,990 − 22,060) × 100 = Rs 7,000. Net = 6,000 − 7,000 = −1,000? Check: total vs entry = (21,990 − 22,000) × 100 = −Rs 1,000, a loss. So the correct option is the loss of Rs 1,000.

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