You are a commodity futures trader. The future price for a contract that expires in a year is at $100. However, the expected future spot price is sitting below that price.
The market is in what is known as “contango.”
This is a situation where buyers gladly pay more money for a commodity in the future than they would for the spot price. They would pay the premium because they're probably not thrilled about paying for storage or other costs if they purchased that oil today.
The futures curve is therefore upward sloping, as prices between the spot and futures price would need to converge. Should that not occur, investors will be presented with a unique opportunity to arbitrage trade the commodity and pocket the difference between the contracts.
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Finance: What is After Hours Trading?1 Views
finance a la shmoop what is after-hours trading well, Wall Street really never [Group of people dealing stocks and shares]
does sleep the normal American stock market runs from 9:30 until 4:00 p.m.
New York time on weekdays so trades happening during that period of time are
just normal not after hours but like I don't know
just on hours....anyway after hours is [New York City becomes dark after hours]
different the city gets dark seemy characters roam the streets
trading stocks from building corners and alleyways yes or maybe not but at 4:01
p.m. after-hours trading begins it's not like a minute earlier there was demand
for a million shares a second to trade on the various primary stock exchanges
and then a minute later demand was zero demand continues always and shares do
trade after market hours more or less all the time the NYC and Nasdaq [People waving at NASDAQ[
exchanges are closed but there are lots of private exchanges or EC ends
electronic communication networks which trade 24/7 365 days a year
well trading is usually much smaller in volume after hours but that volumes [Trading decreases in size]
grown a ton in the last decade and the after-hours number is often useful to
gauge how well or poorly accompanies announced after 4:00 p.m. New York Time [Man reading newspaper]
quarter was received well the after-hours markets indicate almost
immediately and while not always right they give a sense for the direction that
the stock will open the following day on the main exchanges it's also a good time
to build a position secretly without lots of people inspecting on you
screaming out to the New York Stock Exchange I want 18 million shares of [Man screams for shares at New York Stock Exchange]
whatever.com...got it? so if you want to trade on those markets well, you fill
out some forms pay a small entry fee as you buy three large diet cokes and a [3 diet coke cans and a popcorn bucket]
bucket of popcorn and you think about the irony of having ordered your coke as
diet and then you can trade anytime you like yeah in your underwear too it's
kind of fun [Man standing in his underpants]
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