Ethan Frome - Eurex Exchange
... Options and futures trading begins with the determination of an opening price for each option series and each futures contract. The Opening Period comprises the Pre-Opening Period and the netting process. For the purpose of determining a particular opening price, additional orders and quotes may be ...
... Options and futures trading begins with the determination of an opening price for each option series and each futures contract. The Opening Period comprises the Pre-Opening Period and the netting process. For the purpose of determining a particular opening price, additional orders and quotes may be ...
Review of Topics for Midterm 2
... The marginal benefit is measured as the maximum amount that a person is willing to pay for it. So, the marginal benefit of a hamburger is the maximum amount of other goods and services a person is willing to give up to get that last hamburger. DF: The principle of decreasing marginal benefit -- the ...
... The marginal benefit is measured as the maximum amount that a person is willing to pay for it. So, the marginal benefit of a hamburger is the maximum amount of other goods and services a person is willing to give up to get that last hamburger. DF: The principle of decreasing marginal benefit -- the ...
Supply is a relationship between prices and quantities
... groups want to make an exchange. So they negotiate, and some buyers and sellers achieve a compromise and agree upon a price at which they can indeed exchange. This price is called the “equilibrium price.” At this price, not all buyers and not all sellers will participate. For some buyers, the equili ...
... groups want to make an exchange. So they negotiate, and some buyers and sellers achieve a compromise and agree upon a price at which they can indeed exchange. This price is called the “equilibrium price.” At this price, not all buyers and not all sellers will participate. For some buyers, the equili ...
Chapter 4: Using Futures Markets
... company and have silver stored. You own the commodity. 2. An anticipatory hedge: a commodity that you will acquire in the future. If you are a new silver mining company and just have initiated mining operations. You expect to acquire/have silver in the future. 3. An anticipatory hedge: a commodity t ...
... company and have silver stored. You own the commodity. 2. An anticipatory hedge: a commodity that you will acquire in the future. If you are a new silver mining company and just have initiated mining operations. You expect to acquire/have silver in the future. 3. An anticipatory hedge: a commodity t ...
Trading hours from 12 March 2017
... CIRCULAR 17/006 —TRADING HOURS FROM 12 MARCH 2017 CATEGORY: Trading Calendar ...
... CIRCULAR 17/006 —TRADING HOURS FROM 12 MARCH 2017 CATEGORY: Trading Calendar ...
the structure of forward and futures markets
... those holding long/short positions are credited/debited appropriately; differences between today’s settlement price and the previous days settlement price are determined b. clearinghouse officials establish a settlement price; each account is marked to market; differences between today’s settlement ...
... those holding long/short positions are credited/debited appropriately; differences between today’s settlement price and the previous days settlement price are determined b. clearinghouse officials establish a settlement price; each account is marked to market; differences between today’s settlement ...
Chapter 6 Prices and Decision Making
... Advantages of Prices • Prices help produces and consumers decide the three basic questions of WHAT, HOW, and FOR WHOM to produce. • In a competitive market economy prices are neutral because they favor neither the producer not the consumer • Prices are flexible allowing sellers and buyers to adjust ...
... Advantages of Prices • Prices help produces and consumers decide the three basic questions of WHAT, HOW, and FOR WHOM to produce. • In a competitive market economy prices are neutral because they favor neither the producer not the consumer • Prices are flexible allowing sellers and buyers to adjust ...
Contango
Contango is a situation where the futures price (or forward price) of a commodity is higher than the expected spot price. In a contango situation, hedgers (commodity producers and commodity users) or arbitrageurs/speculators (non-commercial investors), are ""willing to pay more [now] for a commodity at some point in the future than the actual expected price of the commodity [at that future point]. This may be due to people's desire to pay a premium to have the commodity in the future rather than paying the costs of storage and carry costs of buying the commodity today.""The opposite market condition to contango is known as normal backwardation. ""A market is 'in backwardation' when the futures price is below the expected future spot price for a particular commodity. This is favorable for investors who have long positions since they want the futures price to rise.""The Commission of the European Communities (CEC & 2008 6) described backwardation and contango in relation to futures prices: ""The futures price may be either higher or lower than the spot price. When the spot price is higher than the futures price, the market is said to be in backwardation. It is often called 'normal backwardation' as the futures buyer is rewarded for risk he takes off the producer. If the spot price is lower than the futures price, the market is in contango.""The futures or forward curve would typically be upward sloping (i.e. ""normal""), since contracts for further dates would typically trade at even higher prices. (The curves in question plot market prices for various contracts at different maturities—cf. term structure of interest rates) ""In broad terms, backwardation reflects the majority market view that spot prices will move down, and contango that they will move up. Both situations allow speculators (non-commercial traders) to earn a profit.""A contango is normal for a non-perishable commodity that has a cost of carry. Such costs include warehousing fees and interest forgone on money tied up (or the time-value-of money, etc.), less income from leasing out the commodity if possible (e.g. gold). For perishable commodities, price differences between near and far delivery are not a contango. Different delivery dates are in effect entirely different commodities in this case, since fresh eggs today will not still be fresh in 6 months' time, 90-day treasury bills will have matured, etc.