The lecture Commodities and Lease Rate by Edu Pristine is from the course Archiv - Financial Markets and Products. It contains the following chapters:
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... - Introduction - Commodity futures and forwards - The commodity lease rate ...
... 1. Ordinary: Deterioration, spoilage, accident etc. 2. Extraordinary: wars, riots, strike etc. Delivery risk: Parties may withdraw from delivery. This risk has been greatly decreased by robust practises by clearing houses. Credit risk: Counter party risk which is mainly an issue ...
... and the price of commodity’s future contract at any given time. Changes in basis is due to changes in cost of carry of the asset. ...
... is the return that makes an investor willing to buy and lend a commodity. Some commodities (metals) have an active leasing market ...
... called the forward curve (or the forward strip) for that date. If on a given date the forward curve is upward-sloping, then the market is in contango. ...
... Then commodity discount rate and the expected growth rate of the commodity price. For a commodity owner who lends the commodity, the lease rate is like ...
... the dividend payment that has to be paid by the person who borrowed a stock. ...
... to be consistent with the forward price. Therefore, when we observe the forward price, we can infer what the lease rate would ...
... Commodity futures and forwards. The commodity lease rate storage ...
... Deterioration, spoilage, accident etc. 2. Extraordinary: wars, riots, strike etc. Delivery risk: Parties may withdraw from delivery. This risk has been greatly decreased by robust practises by clearing houses. Credit risk: Counter party risk which is mainly an issue ...
... of commodity’s future contract at any given time. Changes in basis is due to changes in cost of carry of the asset. Basis risk is generally represented by ...
... return that makes an investor willing to buy and lend a commodity. Some commodities (metals) have an active leasing market. Lease rates can typically ...
... forward curve (or the forward strip) for that date If on a given date the forward curve is upward-sloping, then the market is in contango If the forward curve is downward ...
... discount rate, α, and the expected growth rate of the commodity price, g, for a commodity owner who lends the commodity, the lease rate is like a dividend ...
... has to be paid by the person who borrowed a stock Therefore: Where δ is lease rate ...
... with the forward price. Therefore, when we observe the forward price, we can infer what the lease rate would have to be if a lease ...