ASPECTS OF HEDGING THEORY

In this paper, interpretative comments are offered on some established aspects of the economics of futures trading, including the nature of the equilibrium condition in the case of an inverse carrying charge, some inferences about traders' market positions made from estimates of returns, and the implications of the normal backwardation hypothesis in cases where hedgers are net long. The paper also includes a survey of the recent literature on the forward pricing function of futures markets, with a discussion of, inter alia, the methods used to investigate the hypothesis that futures prices are anticipations of delivery date spot prices, and the possible reasons why some markets perform this function better than others.


Subject(s):
Issue Date:
1980-12
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/22916
PURL Identifier:
http://purl.umn.edu/22916
Published in:
Australian Journal of Agricultural Economics, Volume 24, Number 3
Page range:
210-223
Total Pages:
14




 Record created 2017-04-01, last modified 2018-01-22

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