R19.P1.T3.Hull_Ch5_Spot Prices

[gargi.adhikari]

In Reference to R19.P1.T3.FIN_PRODS_HULL_Ch5_Topic:CONTANGO_BACKWARDATION_FUTURES_PRICES_SPOT_PRICES:-
Quick question while am on this topic --
Over time, the Futures Prices converge onto:-
a) The "Expected Future Spot Prices-E(St)" at time= the Delivery Date..? OR
b) The "Actual Market/Spot Price" at time= the Delivery Date..?

Much gratitude for any insight on this topic..

 

[ShaktiRathore]

Hi,
Over time the Futures price converges to the actual market or spot price of the asset at the Delivery time.

thanks

 

[gargi.adhikari]

@ShaktiRathore Thanks so very much Shakthi for the insight on this

 

[gargi.adhikari]

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