Convergence

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Related to Convergence zone: Intertropical Convergence Zone

Convergence

The movement of the price of a futures contract toward the price of the underlying cash commodity. At the start, the contract price is usually higher because of time value. But as the contract nears expiration, and time value decreases, the futures price and the cash price converge. More generally, convergence trading involves taking two related assets that have different prices with the expectation that prices will converge (the cheaper asset is purchased and the more expensive is sold short).

Convergence

The fact that the futures price and the spot price for a given asset approach one another as a futures contract on that asset approaches maturity. At maturity, the two prices should be equal. The existence of convergence is the basis for the theory that forward rates equal future spot rates, though this idea is more controversial.

convergence

The process by which the futures price and the cash price of an underlying asset approach one another as delivery date nears. The futures and cash prices should be equal on the delivery date.
References in periodicals archive ?
There on the double Doppler: a slight chance of accumulation mainly near the Puget Sound convergence zone .
Normally, north-blowing winds and south-blowing winds meet in an area called the intertropical convergence zone, or ITCZ.
At over 4,000 miles this stretch of the race will see the fleet cross the eastern Pacific, confronting the vagaries of the Inter Tropical Convergence Zone (ITCZ), also known as the Doldrums.
In the summer, monsoon winds already emptied of their moisture flow along the Intertropical Convergence Zone (ITCZ) before they swerve north over the Wahiba Sands.
The Intertropical Convergence Zone along the equator acts as a sort of wind barrier to separate the storms of the Northern and Southern Hemispheres.
According to the Assistant Secretary Alexander Pama of the National Disaster Risk Reduction and Management Council (NDRRMC) seven people were reported missing in three villages in the province of Bukidnon following several hours of heavy rains caused by the presence of an inter-tropical convergence zone and southwest monsoon.
GAM's weather forecast expert, Mohamed Shareef Mohamed Zain, said the Inter-Tropical Convergence Zone (ITCZ) would pass north of the city of Dongola in the Northern state and progresses northward which indicates rainfall in all Sudanese states.