# Tag Info

0

You are confusing the "Total Return" with "Price Return" You didn't put up the ticker for the related index but I assume you are looking at the price return. The future's market value will increase as the dividends are paid out. The index you are using is most likely the price return index, which doesn't include the effect of the ...

2

MSCI World futures are traded nearly 24 hours, while the index constituents only update their prices when their local country stock markets are open - typically this means 1/3 to 2/3 of the index constituent prices are actively updating, the rest are frozen at their last close price. The futures price can be thought of as the market’s guess at the true index ...

4

This is incorrect. There is always a bid/ask spread in futures markets. Futures are different from equities in that there is only one market that can trade them. That guarantees that there is one central location with one book that is always unlocked (and uncrossed).

5

There is usually always at least 1-tick spread. I used to trade Bund and Treasury futures: For example there could be 500 bids for Bund futures at price 173.11, 800 at price 173.10, whilst there are 250 offers at 173.11 and 700 at 173.12. The 250 buy and sell orders at 173.11 clear immediately, then there would be 250 bids left (out of the original 500) at ...

4

There could be any number of explanations for copper to be backwardated and aluminum to be in contango right now. The simplest (and most correct) explanation is the most vague: that these futures curves represent time-varying expectations of supply and demand over the next half year or so. More helpful is to know that copper and aluminum took a sharp dip ...

2

B. The change in the price of the cheapest-to-deliver behind that future is the key. The 100k is a notional required convention, to allow the future to exist. It has no real relevance in the real world, except in the choice of which bond is the cheapest to deliver for that contract, whose dynamics absolutely set the price for that same contract. The “...

2

Answer B is the closest. You can compute returns for any asset over one period as: $$r = \frac{\text{change in price} + FV(\text{net cashflows received})}{\text{starting price}}.$$ This basically breaks your returns into capital gains (term 1) and dividend and interest income (term 2). It might seem that you do not have interest income for a bond futures ...

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