On March 5, Mukund takes a long position in five cashew futures at INR 5,600.

The
= 5 × 50 × 5,600 = INR 1,400,000.
Initial Margin = 5.5% of the total contract value = 0.055 × 1,400,000 = INR 77,000
The margin account for Mukund is shown in Table 5.2. The total value of contracts
Total value = Futures price on that day × Contract size × Number of contracts.

margin account for buyer

A B C D

DATE Future prices total value of contracts dail gain/loss

5-Mar 5,600 1400000 NA
6-Mar 5,650 1412500 12500
7-Mar 5,675 1418750 6250
8-Mar 5,610 1402500 -16250
9-Mar 5,570 1392500 -10000
12-Mar 5,520 1380000 -12500
13-Mar 5,400 1350000 -30000

14-Mar 5,480 1370000 20000

15-Mar 5,570 1392500 22500
16-Mar 5,650 1412500 20000

Thus,
the total margin paid = INR 77,000 + INR 50,000 = INR 127,000, and the final margin
is INR 127,000 + INR 12,500 = INR 139,500. This amount will be returned to the trad
position is closed out.
utures at INR 5,600. The total value of five cashew contracts

,400,000 = INR 77,000

total value of contracts on each day is calculated as:
mber of contracts.

account for buyer

E F G

cum gain/loss margin a/c balance Margin call amt

NA 77000
12500 89500
18750 95750
2500 79500
-7500 69500
-20000 57000
-50000 77000 50000 >

-30000 97000
-7500 119500
12500 139500

000, and the final margin account balance

l be returned to the trader after the futures
margin balance

reaches INR 27,000. The trader will add the

additional amount of INR 50,000 so that the
margin amount
equals the initial margin of INR 77,000.
 margin account for SELLER
A B C D
DATE Future prices total value of contracts dail gain/loss
5-Mar 5,600 1400000 NA
6-Mar 5,650 1412500 -12500
7-Mar 5,675 1418750 -6250
8-Mar 5,610 1402500 16250
9-Mar 5,570 1392500 10000
12-Mar 5,520 1380000 12500
13-Mar 5,400 1350000 30000
14-Mar 5,480 1370000 -20000
15-Mar 5,570 1392500 -22500
16-Mar 5,650 1412500 -20000

On March 5, Amit takes a short position in the five cashew futures at INR 5,600. The total value of five cashew cont
= 5 × 50 × 5,600 = INR 1,400,000.
Initial Margin = 5.5% of the total contract value = 0.055 × 1,400,000 = INR 77,000

the
gain from futures trading is given as the cumulative gain/loss, which is INR 12,500. The total margin paid is the sum
of the initial margin and any amount added upon receiving the margin call. Thus, the total margin paid = INR 77,000
Therefore, the final margin account balance is INR 77,000 – INR 12,500 = INR 64,500.
nt for SELLER
E F G
cum gain/loss margin a/c balance Margin call amt
NA 77000
-12500 64500
-18750 58250
-2500 74500
7500 84500
20000 97000
50000 127000
30000 107000
7500 84500
-12500 64500

5,600. The total value of five cashew contracts

R 12,500. The total margin paid is the sum

. Thus, the total margin paid = INR 77,000.