| Mr. Wong trades Hang Seng Index ("HSI")
futures contracts: |
| Mr. Wong bought 8 HSI futures contracts
when HSI was 27,000 and the margin required
is HK$800,000 (assume HK$100,000 per HSI futures
contracts) |
Assume ABC Brokerage Firm defaults on 2/1/202X,
then the closing HSI on the default date is
used to calculate the compensation amount:
- HSI closes at 26,700 on 2/1/202X
- Each contract losses HK$15,000 (HK$50
for each index point) and total loss is
HK$120,000 for 8 contracts
- The balance of the futures contract margin is HK$680,000 as at the default date.
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