Sentences with phrase «future price of an asset»

By contrast, in a shallow and illiquid market, or in a market in which large quantities of the deliverable asset have been deliberately withheld from market participants (an illegal action known as cornering the market), the market clearing price for the futures may still represent the balance between supply and demand but the relationship between this price and the expected future price of the asset can break down.

These are sometimes called futures, as they lock in the future price of an asset today.

It can also lead you to incorrectly identifying how the future price of an asset will trend.

The value of a derivative depends on the value of its underlying asset, thus by predicting the future price of the asset, the future price of the derivative contract can be judged and traded on.