Trading behaviors on knowledge of price discovery in futures markets

The financial market provides a mechanism for aggregating information of heterogeneous traders, who have different beliefs, knowledge and trading strategies. This paper studies the interactions between traders their impacts on price discovery by developing pricing model futures market. With mathematical analysis, we solve equilibrium its stability conditions system. As findings show, behavioral factors such as risk appetites, degree rationality liquidity combined effect conditions. When are satisfied, can aggregate to form “good knowledge” about price. If investors high appetites or rationality, it is difficult realize function.