Derivative

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

Derivative

Postby chandniwadhwani92 » Wed Dec 17, 2014 5:31 pm

In schweser Page 166 book 5
Future contract characteristics

Standardization- exchange can also set the minimum price fluctuations which is called tick size
Maximum price limits expands during the period of high volatility and are not in effect during delivery month

What does this last sentence means.
Not in effect during delivery month

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Derivative

Postby edupristine » Mon Apr 06, 2015 10:27 am

Maximum Limit is only used during volatility because during volatility price movement keep on fluctuating but during the delivery month price automatically reaches its expected forward price.


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