Comments

  1. avatar says

    Dear Mr Moffat

    In this example 11, when calculating the basis, you are using the mid-point rate against the futures. Can we use the spot on 20 June is 1.4821 instead?

    Thanks

    Hanhvn

  2. avatar says

    Hi! Sir are we not supposed to use 1.4791 as the rate to convert the profit?? The same rate as the transaction? You used the same spot rate for the transaction and for the future profit/loss calculations in the orevious examples to. Over here im confused regarding this point. Please clarify?

    • Profile photo of John Moffat says

      The transaction is paying dollars – so we use 1.4791

      The profit on the futures means receiving dollars – so we use 1.4812

      In both cases it is the spot at the date of the transaction, but which of the two we use depends on whether we are paying or receiving dollars.

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