| Mr. Wong trades Hang Sang Index ("HSI")
futures contracts: |
| Mr. Wong bought 5 HSI futures contracts
when HSI was 13,000 and the margin required
is HK$200,000 (assume HK$40,000 per HSI futures
contracts) |
Assume ABC Brokerage Firm defaults on 13/3/200X,
then the closing HSI on the default date is
used to calculate the compensation amount:
- HSI closes at 12,850 on 13/3/200X
- Each contract losses HK$7,500 (HK$50
for each index point) and total loss is
HK$37,500 for 5 contracts
- The balance of the futures contract margin is HK$162,500 as at the default date.
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