Does the Design of Spot Markets Matter for the Success of Futures Markets? Evidence from Dairy Futures

摘要: This study provides evidence of the importance a well-defined and functioning spot market for success associated futures market. The United States (US) nonfat dry milk has several distinct pricing benchmarks, whereas New Zealand (NZ) single reference price. Our analysis hedging effectiveness shows that none US benchmarks may be hedged effectively with Chicago Mercantile Exchange futures, NZ Stock whole powder contract is an effective hedge Global Dairy Trade benchmark. Four important dimensions design are identified – timeliness, market-based measurement, forward-spot separation, inclusiveness.