Suppose that it is February. You are a speculator. You think that the spread between April gold futures and April silver futures will increase over the next month. In particular, you forecast that if prices rise, then April gold futures will rise faster than April silver futures. You also forecast that if prices fall, then April gold futures will fall more slowly than April silver futures. Hence, you decide to open a spread trade: long one April gold futures and short one April silver futures. Later in March, you close out (i.e., offset) both positions.
The underlying asset for one gold futures contract is 100 oz.
The underlying asset for one silver futures contract is 5,000 oz.
Here is the price data for February when you open both contracts:
Here is the price data in March when you close out both contracts:
What is your total profit or loss on this strategy (ignoring taxes and commissions)? Round your answer to the dollar. If a loss, then enter it as a negative number.
Caution: we always calculate spread per unit as the price of long position minus price of a short position.
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