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I think you are partially correct, but here's the way we look at these and we make markets in many of these products. There's a concept called "arbitrage-free pricing". Essentially there should no way to trade both sides of this and to make risk-free money. So let's take the front month gold contract, the June (GCM6). The first delivery date for it is ...


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I'm going to try to answer my own question here and hopefully someone can come by and confirm I'm right before I accept my own answer. The key to a forward contract is there is no immediate exchange of goods or money. Just an agreement to do so at a later date. To incentivize the seller of the contract it's important to remember if the transaction ...



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