Kestenbaum's Formula

Kestenbaum's Formula is a method used in finance to determine the forward price of a commodity or asset, accounting for storage costs and the cost of financing. It adjusts the spot price (current market price) by adding the costs associated with holding the asset until delivery, such as storage fees and interest expenses. The formula provides a fair value of the asset for future delivery, helping traders and investors compare current prices with expected future prices while considering holding costs. Essentially, it links current prices, future prices, and costs to ensure accurate pricing in markets involving storage and financing costs.