THEORETICAL FUTURES PRICE AND IMPLIED CONVINIENCE YIELD DETERMINATION PROCEDURE

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1. Log into your account or if you are a new user, register your account and enable two factor authentication.
2. Click on either the [Theoretical futures price] button or the [Implied convinience yield] button, this will take you to either the Theoretical futures price parameters page, or the Implied convinience yield parameters page.

Theoretical futures price parameters page, or the Implied convinience yield parameters page.

1. Enter the name of underlying asset.
2. Select the name of currency of valuation from the drop-down list.
3. Enter the current underlying asset spot price.
4. Enter the present value of known discrete storage costs before contract expiry.
5. Enter the continuously compounded storage costs yield rate. The discrete storage costs and the continuously compounded storage costs yield rate enable any storage costs pattern to be accomodated by the model.
6. If prompted, enter the continuously compounded convinience yield. This is the benefit provided by physical ownership of a consumption asset that is not obtained by holding a futures contracts, for eaxmple, ownership of a physical commodity may be more valuable than a futures contract if shortages are expected.
7. If prompted, enter the futures price. This applies when implying the convinient yield.
8. Enter the present value of known discrete income before contract expiry.
9. Enter the continuously compounded income yield. The continuously compounded income yield and the present value of discrete income enable any asset's dividend payment pattern to be accomodated by the model.
10. Enter the expiry period of the futures contract in years.
11. Enter the continuously compounded risk free rate for the futures contract expiry period.
12. Click the submit button and this will take you to the output display page.

Output display page

1. You can view pricing model output together with input parameters you entered.
2. At the bottom of the page you can click on the button to create database record for the current model output. This will take you to the create database record page where you should click on the create button to create the database record.
3. After clicking on the create button to create the database record, you will be taken to the database records view page, where you can scroll vertically or horizontally to view database records including the one you just created.
4. You can filter database records according to the currency of valuation using the filter box. You can click on the details link on the extreme right of a particular database record, this will take you to the particular database record details page.