Sugar- in to win

Quote from trangreg:

Hi--I just completed my first trade with futures. I had bought the July Sugar #11 contract at 8.72 in May. I recently sold it for 8.77. When I do the math, my profit should be a small amount. But when I looked at my IB statement, it had quoted me the closing price of 8.56 (2 days ago) which would be a gain of 8.77-8.56, 21 cents vs. 5 cents, a bigger profit.

Does this mean that my initial buy in price does not matter with overnight trades because futures use the mark to market accounting method? I know they use this method to compute my daily margin but I didn't realize that they use this method to compute my gain/loss as well on a daily basis.
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Sugar trades in cents per pound, so your gain is actually 5 one hundredths of a penny, not five cents. Sugar #11 is a 112,000 lb. contract, so your gain is $56 per contract.

Your initial buy in price does indeed matter, as does the price that you close out the position at. The FCM will just use the daily settlement price to compute your mark to market gain or loss, and that will be used to determine your margin position until you close out the contract. Now that you have closed it out, only that price and the price you initiated the position at are relevant and your gain is realized. Hope this helps...
 
I spoke with Interactive Brokers about my confusion. On their daily statements they show the profit and loss as mark-to-market accounting (daily basis & settlement prices) which complies with their requirement to report your daily margin position. So what they are showing is really your unrealized gain/loss.

But on the monthly statements it should show your realized gains/losses if you closed any contracts. For tax purposes, if I have not closed a contract yet, let's say I have the March 2008 contract, I don't report anything right? Thanks again for your help!
 
Quote from downrivertrader:

I just got another sell signal on Sugar.
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Guess you lost money.

I already made some gains in sugar. Sold part of my position with nice profits, I guess.

Good luck to everyone.
 
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