I was going through the proof about the equality of forward and futures price (assuming constant interest rate) in a book. Somewhere, the authors used the fact that suppose we start with two capitals - say A and B and we end up with the same final capital S, then A=B otherwise there will be arbitrage opportunity. Why arbitrage arises if A and B are not same?
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$\begingroup$ Does this answer your question? Is the forward price equal to the future price? $\endgroup$– Hamish GibsonCommented Sep 16, 2022 at 9:48
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$\begingroup$ I am voting to close this question as I believe it is a duplicate of quant.stackexchange.com/questions/54628/… . If I am correct in interpreting your question correctly, you are asking about why futures and forward contracts don't always equal in price, if so this question above should hopefully answer. $\endgroup$– Hamish GibsonCommented Sep 16, 2022 at 9:49
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Say for example A>B. Then you would sell strategy A versus buying strategy B, collecting A-B initially. At the end you will have S-S, which is zero. So you have a risk free profit.
