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Technical Problems
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Good day. Thanks for the lecture. On the e.g. 11. I do not understand why you are deducting the 1.4799 from 1.4840 to calculate the gain on the futures. In the last 2 previous examples we deducted the sell was the closing future price and the buy the future price now.
In example 9, the underlying transaction is selling $’s because they are receiving $’s. In example 11 the underlying transaction is buying $’s because they are paying $’s.
We buy or sell futures at the current price depending on whether the underlying transaction involves buying or selling the currency. I do explain this, and also read again note 1 below example 9 in the lecture notes.
Dear John
I do find it enjoyable watching your lectures:) thank you for doing what you have been doing. It is much appreciated.
Thank you for your comment 馃檪
You are welcome 馃檪
Hi Mr Moffat, I may be wrong but from 1 July to 31 August should actually be 2 months? Therefore 0.0200 x 2/3 (rather than 1/3). Then from 31 Aug to 30 Sep will be 1/3. You made the point very clearly, I just want to make sure that this logic is correct. Thanks for the lectures!
1 July to 31 August is indeed 2 months. Therefore the basis will have fallen by 2 months out of 3, and the basis remaining will be for 1 month out of 3 i.e. 1/3 x 0.200.
The answer is correct 馃檪
Oh I see, that makes sense 馃檪 Sorry I was a bit confused, now I see how you did it. Thanks so much!