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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 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 results for misère play are now conjectured to follow a pattern of length six with some exceptional values: the first player wins in misère Sprouts when the remainder (mod 6) is zero, four, or five, except that the first player wins the one-spot game and loses the four-spot game. The table below shows the pattern, with the two irregular ...
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 ...
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 = (+)!
The problem of points, also called the problem of division of the stakes, is a classical problem in probability theory.One of the famous problems that motivated the beginnings of modern probability theory in the 17th century, it led Blaise Pascal to the first explicit reasoning about what today is known as an expected value.