Discover the core principles behind futures pricing, including spot price, cost of carry, convenience yield, and the no-arbitrage principle, with practical Canadian market insights and references to CIRO regulations.
Discover how the futures and cash (spot) markets differ, how cost of carry influences price discrepancies, and why basis matters to hedgers and speculators alike.
Discover how the cost of carry shapes futures prices by accounting for financing, storage, insurance, and yield considerations in both commodity and financial markets.
Explore the concept of basis—the difference between spot and futures prices—and discover how it impacts hedging, speculation, and arbitrage in commodity and financial futures markets.
A deep dive into how investors exploit pricing discrepancies between spot and futures markets through purchasing the underlying asset and simultaneously selling futures contracts, ensuring near-riskless profits when conditions are right.
Reverse cash and carry arbitrage is a vital concept in futures pricing that arises when the futures price falls below the fair carrying cost relationship. Explore how short-selling the underlying, investing proceeds, and going long futures can lock in profit, with references to Canadian regulations.
Learn how inverted futures markets, also known as backwardation, arise from supply shortages or strong demand, impacting pricing, hedging, and speculation strategies.
Understand how futures prices tend to align with the spot price as contracts approach expiry, reinforced by arbitrage opportunities via physical or cash settlement, and learn about best practices, regulatory guidelines, and real-world scenarios of convergence in Canadian and global markets.
Explore hands-on interest rate and equity index futures pricing scenarios in Canadian markets, highlighting cost of carry, implied yield, arbitrage strategies, seasonal factors, and official Bourse de Montréal product specifications.
Discover how predictable seasonal patterns in commodities intersect with Bank of Canada policy decisions, shaping basis levels and influencing futures pricing strategies.
Explore how futures prices respond to sudden interest rate hikes, shifts in commodity volatility, and the power of scenario analysis and stress testing under Canadian regulatory oversight.