Split Close

Posted in Finance, Accounting and Economics Terms, Total Reads: 512
Advertisements

Definition: Split Close

This condition occurs in a Futures contract. A Futures contract is one where two parties agree to buy or sell a commodity or share at a certain date in the future. It is a contract between two parties to deliver the asset at a predetermined price. Futures are contracts to buy/sell a specified quantity of financial instruments/commodities.


A Split Close occurs when two future contracts of the same commodity having different maturity dates have different prices during the same trading day. It can be explained as the price difference in the final futures transaction at the end of the trading session.


Example:

Consider two futures contracts based on Exchange rate of Rs./ $ having maturity dates of June and October. On a particular trading day, the closing rates are different. This price difference is termed as a Split Close.

 

Search & Explore : Management Dictionary

Browse the definition and meaning of more terms similar to Split Close. The Management Dictionary covers over 7000 business concepts from 6 categories.

Advertisements



Share this Page on:

Similar Definitions from same Category: