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 softphone component provides an application to drive immediate revenue streams while its platform capabilities and adherence to open standards support the roadmap to fixed mobile convergence of presence and video services.
BARCELONA, Spain -- Convergin, the leading provider of fixed mobile convergence and service interaction solutions, announced today that it will be showcasing a live demonstration of its Accolade WCS SCIM, a network node that allows service providers to orchestrate the delivery of services from SIP/IMS application servers, intelligent network service platforms (SCPs), and now, for the first time, IPTV headend servers.
Included in this announcement is the introduction of a new fixed mobile convergence (FMC) application server product, the Tatara Convergence Server, as well as enhancements to the Tatara Subscriber Gateway, a market leading 3GPP/3GPP2 AAA server.