Today is 1 March 2021 and you have been allocated $A10 million that you will be required to use to trade futures contracts.

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Today is 1 March 2021 and you have been allocated $A10 million that you will be required to use to trade futures contracts.

To collect futures prices for, for example, 29 January 2021 you would need the web address:
https://www2.asx.com.au/data/data/markets/futures/reports/EODWebMarketSummary210129SFT.htm
Note the numbers 210129 refer to the date 29 January 2021
Therefore, to collect prices for 5 February 2021 you would need the web address:
https://www2.asx.com.au/data/data/markets/futures/reports/EODWebMarketSummary210205S FT.htm
For your assignment, you must use settlement prices.

For Part I of the assignment, 3 marks will be awarded for demonstrating via using correct prices, logic and use of deposits an understanding of speculation using the 90-day bank-accepted bill contract, 3 marks will be awarded for demonstrating via using correct prices, logic and use of deposits an understanding of speculation using the 10-year Treasury bond futures contract, 3 marks will be awarded for demonstrating via using correct prices, logic and use of deposits an understanding of speculation using the SPI200 futures contract, and 6 marks will be awarded for demonstrating via using correct prices, logic and use of deposits an understanding of hedging strategies using the SPI200 futures contract.
Part I
Today is 1 March 2021 and you have been allocated $A10 million that you will be required to use to trade futures contracts. You are required to provide a report on all of your trading activity. The word limit for Part I is 1000 words. The following will be your trading instructions over coming weeks. Firstly, if the last digit of your student number is 1 or 2, your instructions are Set A, if the last digit of your student number is 3 or 4, your instructions are Set B, if the last digit of your student number is 5 or 6, your instructions are Set C, if the last digit of your student number is 7 or 8, your instructions are Set D, and if the last digit of your student number is 9 or 0, your instructions are Set E.

Set A
Trading in the 90-day bank-accepted bill contract On Tuesday 30 March 2021, you will be required to enter into four June 2021 90-day bank accepted bill contracts. You may enter into these contracts as a buyer or as a seller. Whether you enter into these contracts as a buyer or a seller will depend on your expectations as to the likely direction of short-term interest rates. Again, you should state a logical basis for entering into these contracts as a buyer or seller. For example, you might speculate that shortterm interest rates are likely to rise or fall. Note that again the basis of your speculation is of lesser importance here than is demonstrating that you understand fully the nature of the transactions that you enter into. Using the settlement price of the June 2021 90-day bank accepted bill contract on Tuesday 30 March 2021, detail your financial position after you have entered into these four contracts. You should ignore margin calls but you should include in your discussion the deposit that you were required to provide. On Monday 3 May 2021, you must close out your position and do so at the settlement price of the June 2021 90-day bank accepted bill contract. Trading in the 10-year Treasury bond futures contract On Tuesday 16 March 2021, you will be required to enter into five June 2021 10-year bond futures contracts. You may enter into these contracts as a buyer or as a seller. Whether you enter into these contracts as a buyer or a seller will depend on your expectations as to the likely direction of long-term interest rates. Again, you should state a logical basis for entering into these contracts as a buyer or seller. For example, you might speculate that longterm interest rates are likely to rise or fall. Note that again the basis of your speculation is of lesser importance here than is demonstrating that you understand fully the nature of the transactions that you enter into. Using the settlement price of the June 2021 10-year bond futures contract on Tuesday 16 March 2021, detail your financial position after you have entered into these five contracts. You should ignore margin calls but you should include in your discussion the deposit that you were required to provide. On Thursday 29 April 2021, you must close out your position and do so at the settlement price of the June 2021 10-year bond futures contract. Trading in the SPI200 futures contract On Wednesday 21 April 2021, you will be required to enter into six June 2021 SPI200 futures contracts. You may enter into these contracts as a buyer or as a seller. Whether you enter into these contracts as a buyer or a seller will depend on your expectations as to the likely direction of the Australian share market. Again, you should state a logical basis for entering into these contracts as a buyer or seller. For example, you might speculate that growth of the Chinese economy is likely to be weaker (stronger) than expected, suggesting that the Australian market will fall (rise). Note that again the basis of your speculation is of lesser importance here than is demonstrating that you understand fully the nature of the transactions that you enter into. Using the settlement price of the June 2021 SPI200 futures contract on Wednesday 21 April 2021, detail your financial position after you have entered into these six contracts. You should ignore margin calls but you should include in your discussion the deposit that you were required to provide. On Thursday 29 April 2021 you must close out your position and do so at the settlement price of the June 2021 SPI200 futures contract. Trading in the SPI200 futures contract On Monday 22 March 2021, you will be notified that your company has a reasonably broadly based portfolio of Australian shares valued on that date at $70,587,239. You will be required to seek protect the value of that portfolio as the company intends to liquidate the portfolio on or about 17 May 2021. You will seek to do this by entering into a number of June 2021 SPI200 futures contracts as either a buyer or a seller. On Monday 3 May 2021, you will be notified that the portfolio of shares has been sold for $75,987,431. The increase in the value of the portfolio was largely due the fact that it was not as broadly based as you had been told, and two companies that formed a large part of the portfolio had been subject to takeover offers during the period. You must now on Monday 3 May 2021 close out your position and do so at the settlement price of the June 2021 SPI200 futures contract. Provide a report of the profit or loss that you made and explain why this occurred.