06.02.2014 - Why we need basis exchanges in commodities
The decade that went by saw increased interest in commodities as an asset class. Most of these investments were made in liquid exchange-listed derivatives. We witnessed the blossoming of new exchanges and product listings from South Africa to Sao Paulo. All of these exchanges have vied singularly for a greater transactional flow that has prompted them to launch newer products. The conventional belief is that futures and cash markets converge on expiry of the contract; hence a futures exchange should in theory reflect the cash fundamentals of the listed commodity..............................................Full Article: Source
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