NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Clearing and Settlement System
An investor buys 2 lots of a stock futures contract, lot size 500, at Rs 400 on day 1. The day 1 settlement price is Rs 405. On day 2 the investor sells both lots at Rs 398 and the day 2 settlement price is Rs 397. What is the total MTM on day 2 (loss shown as negative)?
- A-Rs 8,000Correct
- B-Rs 2,000
- C-Rs 5,000
- D+Rs 7,000
Explanation
Position carried forward from day 1 is valued at the day 1 settlement price of Rs 405. On day 2 it is closed at Rs 398, so the loss is (398-405) x 1,000 units = -Rs 7,000. Wait: quantity is 2 x 500 = 1,000 units, giving -7,000; the settlement price of day 2 is irrelevant because the position is closed.
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