What are the profits and losses in case of a futures position ?
The profits and losses would depend upon the difference between the price at which the position is opened and the price at which it is closed. Let us take some examples. Example 1 a. Position – Long – Buy June Sensex Futures @ 4,800 b. Payoff – b1. Profit – if the futures price goes up b2. Loss – if the futures price goes down c. Calculation – The profit or loss would be equal to fifty times the difference in the two rates. d. If June Sensex Futures is sold @ 4,900 there would be a profit of 100 points which is equal to Rs. 5,000 (100 X 50). e. However if the June Sensex However if the June Sensex Futures is sold @ 4,750, there would be a loss of 50 points which is equal to Rs. 2,500 (50 X50) Example 2 a. Position – Short – Sell June Sensex Futures @ 4,600 b. Payoff – b1. Profit – if the futures price goes down b2. Loss – if the futures price goes up c. Calculation – The profit or loss would be equal to fifty times the difference in the two rates. c1. If June Sensex Futures is bought @
