Forward rate vs spot price
Futures Prices Versus Expected Spot Prices. Futures prices will converge to spot prices by the delivery date. There are 3 hypotheses to explain how the price of futures contracts converge to the expected spot price over their term: expectations hypothesis, normal backwardation, and contango. The price of that good is also determined by the point at which supply and demand are equal to each other.. The spot price is a key variable in determining the price of a futures contract. It can indicate expectations about fluctuations in future commodity prices. Spot Price vs. Future Price