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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Clearing and Settlement System

A trader buys 200 units of a stock futures contract at ₹500 on day 1. The day 1 settlement price is ₹510. On day 2 the trader sells the position at ₹515, and the day 2 settlement price is ₹512. What is the total net profit across the two days after all daily MTM settlements are accounted for?

The net profit is ₹3,000. Day 1 MTM gives (510-500) x 200 = ₹2,000, and the day 2 closing gain is (515-510) x 200 = ₹1,000. The total equals the overall price move of ₹15 on 200 units.

  1. A₹2,400
  2. B₹3,000Correct
  3. C₹1,800
  4. D₹2,000

Explanation

Day 1 MTM = (510-500) x 200 = ₹2,000 gain. On day 2 the position is closed at 515 against the previous settlement price of 510, so the gain is (515-510) x 200 = ₹1,000. The total is ₹3,000, which equals (515-500) x 200 as a check. Using 512 for day 2 would be wrong because the position was closed before that settlement.

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