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 ?
The study discusses opportunities, challenges, points of convergence, and strategic insights for each technology evaluated following extensive interviews with market participants.
The focus is therefore on which particular values represent points of convergence or divergence between elites and masses in the seven countries.
We thus call on other political parties, particularly Nepali Congress and CPN-UML, to reciprocate the Maoist gesture by coming to the negotiating table in good faith, ready to engage in meaningful give-and-take and to scope out possible points of convergence.
Regarding Lebanon, both sides stressed the importance of promoting reconciliation among the 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.
Matisse & Rodin' at the Musee Rodin, Paris (23 October-28 February 2010), finds points of convergence in the sculptural and graphic work of the two masters.
We must always try to communicate with people by building bridges between different cultures and discovering points of convergence between them.
is a leading secular moral philosopher--they have several points of convergence.
If we mean by science a way of understanding the physical nature of the universe, and by religion not rituals but a worldview by which we look at the world, then there are more points of convergence than divergence between religion and science (Kalin).
We found that the points of convergence between liberal arts schools and the business community were more congruent than between students and parents," Crutcher explains.
Bowd highlights the relationship of Querini and Giustiniani with the Florentinepiagnoni and the points of convergence and divergence in their attitudes to reform.
The author identifies points of convergence, proposes a mission statement, and summarizes what career counselors seem intent on doing in the coming years.
Miami is so dispersed, I just don't think there are points of convergence.