[Verse 1] Picture Sarah with her wheat field gleaming gold Harvest coming but the market's getting cold Locks in futures at a hundred twenty-five Knowing spot price tends to dance and dive As expiration crawls closer day by day Watch the gap between these prices fade away [Chorus] Convergence calls, convergence calls Futures drop, spot price crawls Meeting at the finish line Basis shrinks by grand design But beware the twist and turn Basis risk is what you'll learn [Verse 2] Tom's got corn but needs to hedge his bet Sells December futures, safety net is set Spot trades ninety, futures hundred ten Twenty-dollar basis gap right there and then Calendar pages flip toward the end Watch these distant cousins slowly blend [Chorus] Convergence calls, convergence calls Futures drop, spot price crawls Meeting at the finish line Basis shrinks by grand design But beware the twist and turn Basis risk is what you'll learn [Bridge] Quality matters, location too Grade A wheat versus grade two Transport costs can shift the scene Perfect hedge stays just a dream Basis widens, profit fades Hedger's plan needs sharper blades [Verse 3] Expiration day arrives at last Future ghosts become the past Settlement price matches spot Theory proves what traders thought But along the bumpy road Basis carried risky load [Chorus] Convergence calls, convergence calls Futures drop, spot price crawls Meeting at the finish line Basis shrinks by grand design But beware the twist and turn Basis risk is what you'll learn [Outro] Futures fade to spot at end Basis risk remains your friend Plan for gaps that come between Keep your hedging strategy keen
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