A Gasoline Distributor Buys a Gasoline Futures Contract That Requires

A gasoline distributor buys a gasoline futures contract that requires acceptance of 42,000 gallons of gasoline at $2.94 per gallon. How is the account marked to market if gasoline futures close the next day at $2.97?

A) A loss of $1,260 is posted to the account.
B) A gain of $1,260 is posted to the account.
C) A loss of $12,600 is posted to the account.
D) A gain of $12,600 is posted to the account.

Correct Answer:

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