DEC18: Nutourne Co

What we are calculating is the lock-in rate. We are using June futures, and from 'now' (30 November) until the end of the future (30 June) is 7 months. The transaction is taking place on 31 May, which is 6 months from now. Therefore the lock in rate is the current spot rate + 6/7 of the current basis. I do explain what the lock-in rate is, and how to calculate it, in my free lectures on foreign exchange risk.