Good Student
Posts: 22
Joined: Thu Apr 17, 2014 9:40 pm


Postby devinarastogi84 » Thu May 01, 2014 8:22 pm

September futures contract on TCS closed at Rs. 2066 on August 16 and at Rs. 2062 on August 17, 2009. Ravi has a short position of 3000 in the September futures contract from August 16. On August 17, 2009, he sells 2000 units of 12-September-2009 expiring Put Options on TCS at strike price of Rs.2057 for a premium of Rs. 30 per unit. What is his net obligation to/from the Clearing Corporation for August 17, 2009? Kindly Explain this

Finance Junkie
Posts: 981
Joined: Wed Apr 09, 2014 6:28 am


Postby edupristine » Fri May 02, 2014 10:01 am

There is no mark to market:
Ravi will long at Rs 2062 to cover his short position at Rs 2066.
Hence he is making 4*3000 = Rs 12000
He will get premium for short put option = 30*2000 = Rs 60000
So, the net obligation is = Rs 60000 + Rs 12000 = Rs 72000.

Return to “CFA Level II”


Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.