标题: who can clarify this commodity question [打印本页] 作者: kmf229 时间: 2013-4-12 21:49 标题: who can clarify this commodity question
CFAI page 179 reading 38.
The table in page 5 for the cash-and carry.
why is there an arbitrage opportunity for you when the forward pencil price is higher than .221? if you’re shorting a forward @.20, you’re agreeing to sell the pencil for .20 in the future correct? so if the forward price is higher than .221 and you agreed to sell it for .20, you made less money than you could have.
if you are short a forward, aren’t you rooting for the price to decrease in the future, therefore selling something higher than it should?
am i missing something here?作者: zbird2134 时间: 2013-4-12 21:49
if you are making less money than you could have - someone else is making more money than they should… and that is the very principle of arbitrage, right - making money with no investment…作者: fishmarket 时间: 2013-4-12 21:49
“if you are short a forward, aren’t you rooting for the price to decrease in the future, therefore selling something higher than it should?”. Exactly, but what if the price went UP? you’re selling something which you could’ve sold for a higher price in spot market
