Considering an Informational Role for a Futures Market
Review of Economic Studies
1984
This study compares how well current spot prices predict future spot prices for a variety of commodities in a non-futures market environment and examines how the predictive power of the price system is altered after the initiation of futures trading. The results indicate a positive association between the inability of a non-futures market price system to predict the future spot price and the subsequent development of a futures market. The claim that traders can earn a return on information collection after the introduction of a futures price into the pricing system is supported for some, but not all, commodities.
- DOI
- 10.2307/2297703
- Volume
- 51 (1)
- Pages
- 33
- Export
- BibTeX
- Sources
- openalex crossref