Convergence

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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 ?
These principles need to be compared to recent technological advances in the formation and storing of texts so that points of convergence or divergence can be evaluated.
Identify points of convergence of the pharma, food and drinks markets in the prevention of diabetes and the emergence of healthcare nutrition.
Meanwhile, Russian Federal Council's media committee chief Alexei Bushkov referred in a statement to the Russian TV to the need of investing Tillerson's visit in finding points of convergence between the two sides on Syria.
The meeting discussed points of convergence between AGFUND and the European Union in the development area, where the two sides reached a tentative agreement for cooperation between them to support the establishment of banks for the poor, and in the field of vocational training in partnership with the Arab Open University.
In Metro Manila alone, he said the National Capital Region Police Office has stationed over 9,500 policemen in cemeteries, airports, seaports, bus terminals and other points of convergence until Nov.
Jackie Candelario, provincial information officer of the Pangasinan Provincial Police Office (PPPO), said starting October 28 at least 800 police personnel in the province will be deployed to all points of convergence such as cemeteries, malls and transportation terminals to ensure heightened police visibility.
I believe points of convergence were found," he said.
to build our relationship where we have points of convergence with Americans," the official said.
Regarding Lebanon, both sides stressed the importance of promoting reconciliation among Lebanese and searching for points of convergence to serve the interest of Lebanon through forming a government of national unity as the cornerstone for the stability, unity and strength of Lebanon.
The points of convergence between the two branches of the budget authority, the Parliament and the Council, were unchanged at this stage: agreement on the sum of 1 billion, agreement on the payment over three years (2008, 2009 and 2010), and agreement on the use of funds from Heading 4 of the financial framework ( The EU as a global partner') rather than Heading 2 ( Protection of natural resources').
highlights points of convergence and diversity within U.