NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Clearing and Settlement System
A trader sells 1 lot of index futures (lot size 75) at 24,000. The daily settlement price that day is 24,080. The trader's MTM obligation for the day is:
The trader must pay Rs 6,000. A short futures position loses when the settlement price is above the sale price, and the loss is 80 points times the lot size of 75, which equals Rs 6,000 to be paid as MTM.
- APay Rs 6,000Correct
- BReceive Rs 6,000
- CPay Rs 80
- DReceive Rs 1,80,000
Explanation
A short position loses when price rises. Loss per unit is 24,080-24,000 = 80 points. Multiply by 75 units to get Rs 6,000 payable. Receiving Rs 6,000 reverses the sign error.
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