Hey guys, I hv a doubt in currency futures Arbitrage…say, for instance: no-arbitrage price is $1.4409/pound, Sopt price is $1.4390/pound & the future price is $1.4650.…now here to have Arbitrage we sell at high & buy at low…i.e(sell futures and buy spot) now my doubt here is : why we’re discounting the per unit of currency to adjust wid spot price ? when there’s spot price already availabe in the market i.e $1.4390/pound.
I’m not sure what you’re asking, but you may be experiencing the same confusion as is presented in this thread:
http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91337947
thanxs alot… this link helped me to clear my doubt !