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 ?
As may be seen, there are significant points of convergence between the UAE Arbitration Law and the Model Arbitration Law.
The last of these points of convergence makes both books helpful responses to Johnson's call for renewed attention to the just war criterion of authority.
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.
If we take electric to be the transforming space between the corporeal and the ethereal, he can now take this vision of music of a metaphor that is his and search for the points of convergence in the larger universe, the vastness and smallness of all that we know.
While the occasionally contrasting opinions revealed in part the perplexity of marketing ethics, respondents also arrived at points of convergence. All recognized government as playing the most prominent role in issues of public concern, legislation and overall ethical standards.
Discerning the points of convergence between the United States and the Soviet Union was a major preoccupation of scholars influenced by modernization theory and over the years all sorts of similarities were alleged.
Flying in the face of the conventional wisdom that insists there are two separate monolithic and oppositional religious traditions dividing the population of Northern Ireland, this well-written quantitative study demonstrates the heterogeneity among Catholics and Protestants in Belfast and the many points of convergence between the two religious groups that cut across the sectarian divide.
"This survey will help formulate points of convergence on any corporation's fiduciary intents and will help said corporations endeavor diligently to provide succor in their respective attempts to consummate objectives in every category," said Giovanni Woolgatherer, chief executive officer of Buy the Numbers.
When you try to show the parallel between the history of forms and the history of anthropology and biology, you find extraordinarily rich visual material from the last century, and specific points of convergence - Paul Richer's sculpture of a woman with Parkinson's disease, for example, which influenced Rodin and Camille Claudel.
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.
There will be many points of convergence between banks, insurance companies, retailers and telecoms companies.