Profiting From Convergence by Ira G. Kawaller
ARTICLE SYNOPSIS ...Profiting From Convergence
by Ira G. Kawaller
Here are three ways to capitalize on the property of convergence -- the fact that futures prices and spot
prices will necessarily come together at the futures expiration. The same concept can be applied to many
markets, including various other financial futures contracts, as well as assorted hard commodities.
LIBOR (London interbank offered rate) futures contracts are recognized as Chicago Mercantile
Exchange (CME) contracts that pertain to a $3 million one-month Eurodollar time deposit, and the
Eurodollar futures contract refers to the contract w...