futures-contract

Hi all, I would like to understand the relationship between price return and the term structure of futures conteact. I understand that contango is associated with negative roll return while positive roll return with backwardation. How is the price return related to contango and backwardation ...

The value of a futures contract is given by [F(0) - K]*exp(-rT). At contract inception, the delivery price is the prevailing forward price; K = F(0). Over time, as the long/short position tends toward maturity, the term of the contract shortens and the F(0) price changes. The delivery price, K...

Hi David, I was wondering if you could give an example of how an option on a futures contract would work concretely? I am having a hard time figuring out what are the actual steps on this one. Let's say we have a call for instance - is the strike price the same as the price of the underlying...