Page 176 - DCOM510_FINANCIAL_DERIVATIVES

Unit 11: Clearing and Settlement

Notes
Table 11.1: Proprietary position of trading member Mr. X on Day 1
Trading member Mr. X trades in the futures and options segment for himself and two of his clients.
The table shows his proprietary position.
Note: A buy position “200@1000” means 200 units bought at the rate of ` 100.
Trading member Mr. X
Proprietary position Buy Sell
200 @ 1000 400 @100

Table 11.2: Client position of trading member Mr. X on Day 1

Trading member Mr. X trades in the futures and options segment for himself and two of his clients.
The table shows his client position.
Trading member Mr. X
Buy Open Sell Close Sell Open Buy Close
Client Position
Client A 400@1109 200@100
Client B 600@1100 400@1000

Table 11.3: Proprietary Position of Trading Member Mr. X on Day 1

Assume that the position on Day 1 is carried forward to the next trading day and the
following trades are also executed.
Trading member Mr. X
Buy Sell
Proprietary position 200 @ 1000 400 @100

Table 11.4 Client Position of Trading Member Mr. X on Day 1

Trading member Mr. X trades in the futures and options segment for himself and two of his clients.
The table shows his client position on Day 2.
Trading member Mr. X
Buy Open Sell Close Sell Open Buy Close
Client Position
Client A 400@1109 200@100
Client B 600@1100 400@1000

Self Assessment

Choose the correct answer from the following options:
4. In futures trading, profits are received or losses are paid:

(a) In the delivery month
(b) On daily settlement
(c) On the day of expiry of the contract
(d) On a weekly settlement basis

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