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1 February, 04:03

Yesterday, you entered into a futures contract to buy euro at $1.50/€. Your initial margin was 45% and your maintenance margin is 30%. At what threshold settlement price (use 4 decimal places) do you get a margin call?

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  1. 1 February, 05:57
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    Answer is 1.1785.

    Refer below for the explanation.

    Explanation:

    Euro at $1.50/€.

    Initial 45%

    Maintenance 30%

    Price = Initial price * (1 - margin / 1 - maintenance)

    Put the values provided in te question,

    = 1.50 * (1-45% / 1-30%)

    =1.50 * (0.55/0.70)

    =1.1785
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