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A futures contract is a exchange traded device where someone can speculate on or hedge price risk regarding a specific commodity, bond market or stock index asset.
The contract is a binding agreement of delivery of an asset at a predetermined time in the future.
At first futures prices vs. the current price of the underlying asset they represent are not the same due to the time value of future money, market forecast opinion, news, etc.
But as the futures contract comes to it's time conclusion it's price starts to closely track the spot or actual cash market price of the asset.
In the end they are both at parity as the futures contract ends at the delivery date and thus is then equal to the then current cash market price of the underlying asset.
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What is the natural gas futures prices target?
the natural gas futures prices target is about 665,000
How do speculators know what positions to take in futures markets in order to profit from superior forecasts of future spot prices?
ive never wiil no it
What is backwardation in commodity markets?
In short, whether we have Backwardation or Contango depends on how the expected future spot prices are quantified and how the related commodity strips behave. Contango and Backwardation in Common Usage Investment professionals on financial TV channels and in newspapers colloquially refer to upward trends in futures prices as contango and downward trends in futures prices as backwardation. Contango and Backwardation in Economic TheoryIn economic theory regarding Backwardation and Contango, associated with John Maynard Keyns and John Hicks, for Contango to exist, expected spot prices (someday in the future) have to be lower than current futures prices for the same future moments, and reverse has to apply for Backwardation. Thus whether we have a contango or bacwardation depends on an arbitrary forward estimate of spot prices. For example, if we estimate that today's spot price, price at which a physical commodity is trading today, is an expected spot price someday in the future, and we see an upward trend in a commodity strip (series of future contracts prices), we see a contango. On the other hand, if the futures prices in a commodity strip trending upwards are considered unbiased estimates of the expected future spot prices, meaning they are equal, there is no Contango or Backwardation to speak of. By the way, upward trend of estimates may be a result of storage expenses.
What is contango in commodity markets?
In short, whether we have Backwardation or Contango depends on how the expected future spot prices are quantified and how the related commodity strips behave. Contango and Backwardation in Common Usage Investment professionals on financial TV channels and in newspapers colloquially refer to upward trends in futures prices as contango and downward trends in futures prices as backwardation. Contango and Backwardation in Economic TheoryIn economic theory regarding Backwardation and Contango, associated with John Maynard Keyns and John Hicks, for Contango to exist, expected spot prices (someday in the future) have to be lower than current futures prices for the same future moments, and reverse has to apply for Backwardation. Thus whether we have a contango or bacwardation depends on an arbitrary forward estimate of spot prices. For example, if we estimate that today's spot price, price at which a physical commodity is trading today, is an expected spot price someday in the future, and we see an upward trend in a commodity strip (series of future contracts prices), we see a contango. On the other hand, if the futures prices in a commodity strip trending upwards are considered unbiased estimates of the expected future spot prices, meaning they are equal, there is no Contango or Backwardation to speak of. By the way, upward trend of estimates may be a result of storage expenses.
Is the meaning of backwardation and contango used in finance textbooks the same as the colloquial meaning used by Wall Street?
In short, whether we have Backwardation or Contango depends on how the expected forward spot prices are quantified and how the related commodity strips behave. Contango and Backwardation in Common Usage Investment professionals on financial TV channels and in newspapers colloquially refer to upward trends in futures prices as contango and downwards trends in futures prices as backwardation. Contango and Backwardation in Economic TheoryIn economic theory regarding Backwardation and Contango, associated with John Maynard Keyns and John Hicks, for Contango to exist, expected spot prices (someday in the future) have to be lower than current futures prices for the same future moments, and reverse has to apply for Backwardation. Thus whether we have a contango or bacwardation depends on an arbitrary forward estimate of spot prices. For example, if we estimate that today's spot price, price at which a physical commodity is trading today, is an expected spot price someday in the future, and we see an upward trend in a commodity strip (series of future contracts prices), we see a contango. On the other hand, if the futures prices in a commodity strip trending upwards are considered unbiased estimates of the expected future spot prices, meaning they are equal, there is no Contango or Backwardation to speak of. By the way, upward trend of estimates may be a result of storage expenses.
The Sydney Stock Exchange quotes prices for futures trading What does the initials SPI stand for?
spi futures
What is stock and index futures?
Bets on future prices.
What is a contango position?
A commodity market is in contango if the spot price is lower than the futures price. A contango position is the futures position you hold with a price higher than spot price.
Did ikonfx create the Spot Gold Futures contract in response to DFA legislation?
Yes,in cooperation with NASDAQ OMX Futures Exchange,IKONFX created the Spot Gold Futures contract in response to Dodd Frank Act (DFA) legislation, which forced the cessation of all leveraged retail spot gold transactions.
What can be found on the FTSE Futures website?
On the FTSE Futures website, there are predictions for stock prices of stocks in the London stock exchange. It also include materials future prices, such as gold and wheat.
Where can one find commodity futures prices?
One can find commodity futures prices from the following sources: Saxo Markets, Bloomberg, Barchart, PSG Online, Commodity Charts, Investopedia, to name a few.
What is a backwardation?
A backwardation is a situation in a futures market where prices for future delivery are lower than prices for immediate delivery.
