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 ?
Digital convergence exerts significant pressure on companies to reconsider their competitive position for gaining a competitive advantage (see Figure 1).
Digital convergence requires a high level of technological flexibility.
In the case of the digital convergence map for the Texas Technology Corridor, we first defined the boundaries of what constitutes digital convergence, then established a full set of digital convergence technology paths that would be used to satisfy customer needs, and finally detailed the full range of capabilities that could be used to implement the paths to generate a competitive advantage toward satisfying customer needs.
In the broadest sense, digital convergence is the coalescence of all the functions for the acquisition, storage, distribution and utilization of all present and future human knowledge.
Reflecting the many advancements taking place as a result of digital convergence, the number of participants will surpass that of CEATEC JAPAN 2005, when 788 exhibitors, including 293 from 28 countries and regions outside Japan, operated 2,775 booths.
The organizers and sponsors of CEATEC JAPAN 2006 would like to encourage people from around the world to visit the exhibition and experience the changes to society, lifestyles and business being brought about by digital convergence.
NuVisions commitment to delivering digital convergence is sustained by industry trends and research.
Recognizing the huge market potential for IPTV, we intend to leverage the next generation of the Telkonet iWire System(TM), currently being designed, to deliver a diverse range of multi-media services, as the final step in the digital convergence process.

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