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  2. Spot–future parity - Wikipedia

    en.wikipedia.org/wiki/Spot–future_parity

    Spot–future parity. Spot–future parity (or spot-futures parity) is a parity condition whereby, if an asset can be purchased today and held until the exercise of a futures contract, the value of the future should equal the current spot price adjusted for the cost of money, dividends, "convenience yield" and any carrying costs (such as storage).

  3. Futures contract - Wikipedia

    en.wikipedia.org/wiki/Futures_contract

    Money portal. v. t. e. In finance, a futures contract (sometimes called futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument.

  4. Market clearing - Wikipedia

    en.wikipedia.org/wiki/Market_clearing

    A market-clearing price is the price of a good or service at which the quantity supplied equals the quantity demanded, also called the equilibrium price. The theory claims that markets tend to move toward this price. Supply is fixed for a one-time sale of goods, so the market-clearing price is simply the maximum price at which all items can be ...

  5. Spot market - Wikipedia

    en.wikipedia.org/wiki/Spot_market

    e. The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery. [1] It contrasts with a futures market, in which delivery is due at a later date. [2] In a spot market, settlement normally happens in T+2 working days, i.e., delivery of cash and commodity must be done ...

  6. Overshooting model - Wikipedia

    en.wikipedia.org/wiki/Overshooting_model

    Macroeconomics. The overshooting model, or the exchange rate overshoot hypothesis, first developed by economist Rudi Dornbusch, is a theoretical explanation for high levels of exchange rate volatility. The key features of the model include the assumptions that goods' prices are sticky, or slow to change, in the short run, but the prices of ...

  7. Law of one price - Wikipedia

    en.wikipedia.org/wiki/Law_of_one_price

    The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold at different locations should be sold for the same price when prices are expressed in a common ...

  8. Price discovery - Wikipedia

    en.wikipedia.org/wiki/Price_discovery

    Price discovery process involves buyers and sellers arriving at a transaction price for a specific item at a given time. It involves the following: [1] Risk management choices. "Market" is a broad term that covers buyers, sellers and even sentiment. A single market will have one or more execution venues, which describes where trades are ...

  9. Spot contract - Wikipedia

    en.wikipedia.org/wiki/Spot_contract

    Spot contract. In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the trade date. The settlement price (or rate) is called spot price (or spot rate ).