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Widening Basis

The basis can develop a widening trend when the spot price of an asset/ commodity increases faster than the futures...

Reverse Cash and Carry

A cash and carry transaction that is reversed. It involves the simultaneous sale of a cash market commodity/ instrument for...

Spot Price

The price at which a commodity or a financial instrument (a derivative) for immediate delivery is selling at a specific...

Carrying Charges

The sum of all expenses incurred on holding an asset, literally: storage, insurance and financing costs, subtracted from the income...

Cost of Carry

The sum of all expenses incurred on holding an asset, literally: storage, insurance and financing costs, subtracted from the income...

Basis

It is the difference between the spot price of an asset and the futures price (of the asset underlying the...

Backwardation Swap

A commodity swap in which two counterparties exchange cash flows based on two prices: the sport price and the future...

Sticky Strike

With respect to an option's strike (strike price), it refers to the situation where the implied volatility (volatility skew) remains...

Sticky Smile

With respect to an option's strike (strike price), it refers to the situation where the implied volatility (volatility skew) remains...

Sticky Delta

A situation where the implied volatility (volatility skew) remains unchanged (i.e., it sticks) for any given delta or moneyness. Options...