Week 9 Session: Futures

A worked-calculation session, reapplying Week 8’s margin method to a different instrument: a futures contract’s obligation instead of a stock position’s ownership.

What you’re given#

A simulated futures contract’s terms: contract size, current price of the underlying, and the initial margin the exchange requires — smaller, as a fraction of contract value, than the stock margin from Week 8.

What you do#

State the obligation the contract creates for the buyer and for the seller (neither owns anything today), then calculate the notional value, the implied leverage multiple, and the profit or loss from a stated price move — using the same margin logic as Week 8, applied to a contract instead of a stock.

What you produce#

Worked notional-value, leverage-multiple and profit/loss calculations for both sides of the contract.

Why it matters#

This contract, and its straight-line payoff, is the reference point Week 10 compares an option against.