NISM Certifications · NISM-Series-VIII: Equity Derivatives · Basics of Derivatives
A trader buys one lot of Nifty futures of 50 units at 22,000. The next day's settlement price is 22,060 and the day after it is 22,010. What is the cumulative mark-to-market position of the trader at the end of the second day?
The trader has a cumulative gain of Rs 500. Day one gives a gain of Rs 3,000 on a 60 point rise over 50 units, and day two gives a loss of Rs 2,500 on a 50 point fall. Net is 10 points times 50 units, which equals Rs 500.
- AGain of Rs 500Correct
- BGain of Rs 3,000
- CLoss of Rs 2,500
- DGain of Rs 3,500
Explanation
Day 1 gain = (22,060 - 22,000) x 50 = Rs 3,000. Day 2 change = (22,010 - 22,060) x 50 = -Rs 2,500. Cumulative = 3,000 - 2,500 = Rs 500 gain. Check: (22,010 - 22,000) x 50 = 500. Rs 3,000 ignores day 2's fall.
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