Cryptocurrency Q&A
What is futures cheapest to deliver?
What is futures cheapest to deliver?
ShintoSpirit
Thu Sep 05 2024
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6 answers
1510
Can you elaborate on the concept of "futures cheapest to deliver" in the context of cryptocurrency and finance? Are you referring to the underlying asset that is most economical for a futures contract holder to fulfill their obligation upon expiration? If so, how is this determined, and what factors play a role in identifying the cheapest asset to deliver? Additionally, how does this concept impact the pricing and trading dynamics of futures contracts in the cryptocurrency market?
6 answers
CryptoKing
Sat Sep 07 2024
The concept of cheapest to deliver (CTD) pertains specifically to futures contracts, where it signifies the most cost-effective security that can be transferred to a long position holder to fulfill the contractual obligations.
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QuasarStorm
Sat Sep 07 2024
This term holds relevance exclusively in contracts that permit a selection from a range of slightly varying securities for delivery.
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SeoulSerenitySeekerPeaceLover
Sat Sep 07 2024
Determining the CTD involves a meticulous analysis of various factors, including the price differential between the security and the futures contract, conversion factors, and interest rates.
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RiderWhisper
Sat Sep 07 2024
The CTD calculation ensures that the party in the long position receives the most economically viable security to satisfy the contract, minimizing costs and optimizing the trade's profitability.
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Martina
Fri Sep 06 2024
Market participants closely monitor CTD dynamics as they can significantly impact the pricing and trading activity of the underlying futures contract.
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