question archive You are hedging two futures contract each being worth 15,000 pounds
You are hedging two futures contract each being worth 15,000 pounds
Subject:FinancePrice: Bought3
You are hedging two futures contract each being worth 15,000 pounds. Suppose that in September 2019 a company sells a March 2021 orange juice futures contract for 130 cents per pound. At the end of December 2019, the futures price is 145 cents; at the end of December 2020, it is 110 cents; and in February 2021, it is closed out at 122 cents. The company has a December 31 year end. What is your profit or loss on the contract? How is your profit/loss realized if you are a speculator? Briefly discuss.
