Describes an inevitable change in the relationship between cash and futures prices for instruments until delivery. Prior to delivery, the futures price and the cash price differ by the cost of carry. As time passes, the cost of carry diminishes and the futures price will equal the cash price at the time of delivery. This is a necessary condition for the futures contract to effectively hedge the cash instrument.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). convergence. Retrieved September 20, 2026, from http://smartdefine.org/convergence/definitions/1150743 |
| Chicago | Barry Goldsmith. 2010. "convergence" http://smartdefine.org/convergence/definitions/1150743 (accessed September 20, 2026). |
| Harvard | Barry Goldsmith 2010, convergence, Smart Define, viewed 20 September, 2026, <http://smartdefine.org/convergence/definitions/1150743>. |
| MLA | Barry Goldsmith. "convergence" 21 October 2010. Web. 20 September 2026. <http://smartdefine.org/convergence/definitions/1150743> |