Q2Dec2013 & Q2Dec 2011

Have you watched the free lecture on futures? December 2013: Today is 1 November 2013, and we are using March futures which expire on 31 March. So there is 5 months left on the future. The transaction occurs on 1 February 2014, which is 3 months from now. So we will close the futures deal in 3 months time when there is still 2 months left on the future. We assume that the basis falls linearly to zero over the life of the future, so on the date we finish the deal, the basis will have failen by 3/5, or alternatively there will be 2/5 remaining. It is the same logic for December 2011 question.

Thanks John

You are welcome :-)