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 ?
Macroeconomic performance and convergence in OECD countries.
Economic growth and convergence across the United States (No.
They both averred that convergence of technologies and services is imperative on the availability of broadband and right regulations to foster and not impede growth.
Also speaking, Head, Lagos Regional Business office of Nigerian Communications Satellite Limited (NIGCOMSAT) Ibiye Ukoko said with convergence, voice and data services are merging to belong to a single data stream, adding that a single device like mobile phones can handle calls, instant messages, stream television, photography and email etc.
The US Convergence Insufficiency Treatment Trials group (CITT) attempted to set clear diagnostic limits in order to collect valid data.
We would all agree that remote convergence, poor fusion ranges, large near exophorias and more severe symptoms are problems that need treating--and that treatment can be very effective--but where is your personal limit?
In fact, more attention has been paid to the testing of consumption convergence in the EU region in recent years, especially with the accession of transition economies as new members.
On top of the above-mentioned innovations, this paper also contributes by probing into the issue of fiscal convergence among the RCEP economies.
TECHNOLOGICAL CAPABILITIES AND PATTERNS OF INCOME CONVERGENCE IN EUROPE: A CLUSTER ANALYSIS
A precondition for convergence among economies is economic growth, so convergence processes have been analysed within growth theories framework.
This paper contributes to the sparse literature on inequality convergence by empirically testing convergence across states in the U.S., using annual state-level data from 1916 to 2012 constructed by Frank (2014).
provides a more homogeneous test for conducting convergence tests for income inequality than a panel of countries.

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