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In your futures video you have mentioned to use mid market spot rates instead of buy or sell rate depending on whether its import or an export
rather than the buy or sell rates
and you told technically your method is correct
can you give me one or two reasons or assumptions explaining in simple terms why mid market spot rate is better than either using buy or sell rate which is used in the rivison kit ?
I only say that in relation to calculating the basis when dealing with futures. It is because only one futures price is given, whether we are buying or selling futures.
In no other case do we use the mid-market price.
Ok thank you
Yes this is exactly the situation i was asking on
so to say
if the reason is
only one futures price is givenBut the future price is given for either buy or sell right and not for both
if it for both then i guess your assumption is valid
i think its for both buy as well as sell
but when we are calculating/predicting the future rate it is meant for either buying or selling
Just mention the future rate calculated is for both buying and selling then no more explanation is required as its pretty much logical as the spread is for both buy and sell
right?Yes – the futures price is for both buying and selling 🙂
(Be careful when you write anything in the exam that you refer to the ‘futures price’ because calling it the future rate could refer to the exchange rate in the future.)
Oh Thank you for this piece of information as well i thought both of them were the same
oh god again confusing
instead of anothor post in a new forum please explain in a sentence or two the difference between future price and future rate
i thought the future price for the future that is three months in advance hence future rate
any ways ill mention future price for this all future price and not rate
where do we use the term future rate any ways then?
Todays futures price is the current price of the future (and we can estimate what the futures price will be on a future date).
The reason not to use the words ‘future rate’ is you could be meaning the spot exchange rate on a future date, which is not the same thing.
Ok thank you thats all for this forum , if any other doubt comes up ill make a new forum.
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