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Profit Calculation against US Dollars:
(Sell Price - Buy Price) X Contract Value X No. of contracts Less (+/-) Interest = Profit/Loss
Interest Calculation:
(Closing Price X Contract Value) X (+/-) Interest rate / 360 X No. of day X No. of Contracts = Interest earned / Interest paid
EXAMPLES:
Spot Silver
Sell 3 contracts of Spot Silver and settle on the same day.
| Sell Price: |
US $7.30 per troy oz. |
| Buy Price: |
US $7.20 per troy oz. |
| Contract Value: |
5,000 troy oz |
| Calculation of Profit and Loss: |
(7.30 - 7.20) X 5,000 X 3 = US $1500 (Profit) |
Spot Gold
Sell 3 contracts of Spot Gold and leave the position open for 1 month. (For this example, assume there is no change in Spot Gold price and interest is earned.)
| Closing Price: |
US $550 per troy oz. |
| Interest Rate: |
+ 4.0% per annum |
| Contract Value: |
100 oz |
| Interest Earned: |
Interest Earned: (US $550 X 100) X 4.0% / 360 X 30 X 3 = US $549.99 (Profit) |
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