It has been a quiet day and with 20 minutes to go to the end of trading the Singapore Blue Chip are down 1 point from the previous close. You think, however, that there is a chance the market will recover before the end of the session and end in positive territory.
Our price for the Singapore Blue Chip to finish up is 0 - 2.
You decide to buy 2 contracts at 2, the offer price. Each contract is worth SGD10 per point, so you are only risking SGD40.
The underlying index drifts up over the next 20 minutes, and just before the close is standing 0.1 point down on the day. Finally the official closing price comes through: up 0.2 from the previous settlement. Despite only ever risking SGD40 you have cleared nearly SGD2000 profit.
Profit
| Closing level | 100 |
| Opening level | 2 |
| Difference | 98 |
Profit = 98 x 2 contracts x SGD10 = SGD1960