Commodity Speculation
Nov: Short 3 May K (.4400 x 38,000 x 3 ) = + 50,160
Feb: Long 3 May K (.4850 x 38,000 x 3 ) = - 55,290
Loss of 10.23 % = - 5,130
You have lived in NYC your whole life and are
independently wealthy. You think you know
everything there is to know about pork bellies
(uncurred bacon) because your butler fixes it for you
every morning. Because you have decided to go on a
diet, you think the price will drop over the next few
months. On the CME, each PB K is 38,000 lbs. Today,
you decide to short three May Ks @ 44.00 cents per
lbs. In Feb, the price rises to 48.5 cents and you
decide to close your position. What is your gain/loss?