Hedging in the futures markets only works to the extent that the price of the commodity in the cash market and the price of the commodity in the futures market converge as a futures contract expires.
Carl Levin: “Hedging in the futures markets only works to the extent that the price of the commodity in the cash market and the price…”
Editor's note · Context
Levin stresses the importance of price convergence for effective hedging.
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