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Contango is a situation in which the futures price (or forward price) of a commodity is higher than the expected spot price of the contract at maturity. [1] In a contango situation, arbitrageurs or speculators are "willing to pay more [now] for a commodity [to be received] at some point in the future than the actual expected price of the ...
The opposite market condition to normal backwardation is known as contango. Contango refers to "negative basis" where the future price is trading above the expected spot price. [3] Note: In industry parlance backwardation may refer to the situation that futures prices are below the current spot price. [4]
The concept started to be used by oil traders in the market in early 1990. [2] But it was in 2007 through 2009 that the oil storage trade expanded. [6] Many participants—including Wall Street giants, such as Morgan Stanley, Goldman Sachs, and Citicorp—turned sizeable profits simply by sitting on tanks of oil. [5]
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One possibility to "fix" the formula is use the stochastic collocation method and to project the corresponding implied, ill-posed, model on a polynomial of an arbitrage-free variables, e.g. normal. This will guarantee equality in probability at the collocation points while the generated density is arbitrage-free. [4]
The probability the gambler does not lose all n bets is 1 − q n. In all other cases, the gambler wins the initial bet (B.) Thus, the expected profit per round is () = (()) Whenever q > 1/2, the expression 1 − (2q) n < 0 for all n > 0. Thus, for all games where a gambler is more likely to lose than to win any given bet, that gambler is ...
A 2-spot game of Sprouts. The game ends when the first player is unable to draw a connecting line between the only two free points, marked in green. The game is played by two players, [2] starting with a few spots drawn on a sheet of paper. Players take turns, where each turn consists of drawing a line between two spots (or from a spot to ...
Let ′ (,,,) be the probability of an East player with unknown cards holding cards in a given suit and a West player with unknown cards holding cards in the given suit. The total number of arrangements of (+) cards in the suit in (+) spaces is = (+)!