Buying Futures Contracts, Then Selling at the Spot Price, Yielded Annualized Returns Exceeding 18% since 1993.DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c45720) has announced the addition of "Why Does Hedging Cost So Much?" to their offering Are oil and gas forward prices unbiased estimates of oil and gas prices in the future? This report looks at data over the past 12 years to determine if buying futures 18 months before expiry, then selling at spot price on the expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. yielded returns. An unbiased estimator will, on average, yield the true value of a random variable. If forward prices are unbiased estimates of oil and gas prices, then the average difference between the forward price and the actual price will be zero. There may be a lot of variation, but the errors would cancel each other out over time. This report is useful for gaining insight into the predictive power The predictive power of a scientific theory refers to its ability to generate testable predictions. Theories with strong predictive power are highly valued, because the predictions can often encourage the falsification of the theory. of the futures market futures market, a commodity exchange where contracts for the future delivery of grain, livestock, and precious metals are bought and sold. Speculation in futures serves to protect both the developers and the users of the commodities from unfavorable and unpredictable . Why you should read this: * Buying futures contracts Futures Contract An exchange traded agreement to buy or sell a particular type and grade of commodity for delivery at an agreed upon place and time in the future. Futures contracts are transferable between parties. , then selling at the spot price, yielded annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. returns exceeding 18% since 1993. * This 18% return was gained at the expense of hedgers, who were selling futures contracts. For more information visit http://www.researchandmarkets.com/reports/c45720 |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion