As a hypothetical example, suppose you sell 3 contracts of Nikkei 225 Futures at 40,000 yen and close the trade by buying them back at 39,880 yen. Ignoring fees, what is the profit or loss?
Quiz: How Listed Products Work
Last reviewed: September 24, 2026
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5 questions to check your understanding of the chapter “How Listed Products Work”. Choose an answer and select “Check answer” to see the answer and explanation. You can also open “Answer and explanation” to see the answer first.
Question 1
Answer and explanation
Answer: C
The result is a profit of 360,000 yen. For the seller, the profit or loss is (sale price − buyback price) × contract unit × quantity, and the contract unit of Nikkei 225 Futures is the Nikkei Stock Average × 1,000 yen. So (40,000 − 39,880) × 1,000 × 3 gives 360,000 yen. Counting in ticks gives the same answer. The 120 yen fall is 12 ticks of 10 yen, and one tick is worth 10,000 yen per contract, so 12 × 10,000 yen × 3 contracts is 360,000 yen.
A profit of 120,000 yen is what you get if you forget to multiply by the 3 contracts. A profit of 3.6 million yen comes from multiplying the 120 yen fall by the 10,000 yen per tick and by the 3 contracts. The 10,000 yen should be multiplied by the number of ticks, 12, not by the 120 yen price move. A loss of 360,000 yen is the result seen from the buyer's side. The seller makes a profit when the price falls.
Learn more: Contract Months and Tick Sizes
Question 2
If an open position in Nikkei 225 Futures (the quantity not yet closed) remains after the last trading day, how is it finally settled?
Answer and explanation
Answer: B
An open position in Nikkei 225 Futures is finally settled at the special quotation (SQ value). The SQ value is calculated from the opening prices of the stocks in the Nikkei Stock Average on the SQ day, which is the business day after the last trading day. Only the difference between the traded price and the SQ value changes hands, and this method is called cash settlement. If the SQ value is higher than the traded price, the buyer receives the difference and the seller pays it.
If you think a futures contract is settled by exchanging the underlying asset for cash, as 10-year JGB Futures are, you would choose the option of exchanging the stocks. However, physical delivery of bonds against cash is the method for 10-year JGB Futures, and Nikkei 225 Futures exchange only the difference. The option using the closing value on the last trading day is also wrong. The SQ value is not the closing value on the last trading day; it is calculated from the opening prices of the stocks on the SQ day, the next business day.
Learn more: Contract Months and Tick Sizes
Question 3
As a hypothetical example, suppose you buy 1 contract of a futures product at 1,000 on day 1, and each 1-point price move gives a profit or loss of 10,000 yen per contract. The settlement price is 990 on day 1 and 1,005 on day 2. What is the mark-to-market profit or loss on day 2?
Answer and explanation
Answer: C
The mark-to-market result on day 2 is a profit of 150,000 yen. Marking to market is revaluing open positions every day at the settlement price and calculating that day's profit or loss. On day 1 the price move is measured from the traded price, and from day 2 onward from the previous day's settlement price. On day 2, the rise from 990 to 1,005 is 15 points, and 15 × 10,000 yen gives a profit of 150,000 yen.
If you think each day's profit or loss is always measured from the traded price, you would take the rise from 1,000 to 1,005 and choose a profit of 50,000 yen. However, 50,000 yen is the cumulative result over the two days: the loss of 100,000 yen on day 1 plus the profit of 150,000 yen on day 2. A loss of 100,000 yen is the result for day 1, when the price fell from 1,000 to 990.
Learn more: Futures Margin and Daily Settlement
Question 4
As a hypothetical example, suppose a customer deposits margin not in cash but in securities valued at 600,000 yen, and buys 1 futures contract. The value of the securities does not change, the margin requirement is 500,000 yen, and nothing is due to be received or paid other than the mark-to-market profit or loss. If the mark-to-market loss on day 1 is 120,000 yen, what is the minimum amount the customer must deposit in cash?
Answer and explanation
Answer: B
The customer deposits at least 120,000 yen in cash. There are two kinds of shortfall. The cash shortfall is the amount by which the cash deposited falls below the cash due to be paid for mark-to-market losses and other items; here the cash deposited is 0 yen, so it is 120,000 yen. Total margin received is the 600,000 yen of securities minus the 120,000 yen loss, or 480,000 yen. This is 20,000 yen below the margin requirement of 500,000 yen, so the total shortfall is 20,000 yen. The customer deposits at least the larger of the two, 120,000 yen. Margin can be deposited in securities, but the part that covers the cash shortfall must be deposited in cash.
20,000 yen is what you get if you look only at the total shortfall. Even when the total shortfall is small, the cash shortfall of 120,000 yen must be deposited in cash. 140,000 yen is the sum of the two shortfalls, but the customer deposits at least the larger of the two.
Learn more: Futures Margin and Daily Settlement
Question 5
3-month TONA interest rate futures are listed on both Osaka Exchange and Tokyo Financial Exchange. Which combination of central counterparties is correct for trades bought on each exchange?
Answer and explanation
Answer: A
The central counterparty for a trade bought on Osaka Exchange is Japan Securities Clearing Corporation (JSCC), and for a trade bought on Tokyo Financial Exchange it is Tokyo Financial Exchange itself. Tokyo Financial Exchange clears its own listed products, and JSCC clears the products listed on Osaka Exchange, Tokyo Commodity Exchange, and Osaka Dojima Exchange. So even for the same type of futures, the settlement counterparty changes depending on which exchange the trade is made on.
The option naming JSCC for both is the answer you get if you assume the same product has the same clearing house. However, Tokyo Financial Exchange products are cleared by the exchange itself, not by JSCC. The option naming the exchange itself for both does not fit the fact that JSCC clears Osaka Exchange products.
Learn more: Japanese Exchanges and Listed Products