Suppose you’re a commodity trader. Someone offers you a future contract to buy gasoline at $2.99/gallon for the next three years. If you think that you can sell that gasoline for more than that, you might think this is a license to print money, and would therefore pay for that privilege. Which raises the following questions:
- How much would you pay for that future “strip”?
- Is the answer to Question 1 more or less than a Chrysler?