What Is the Term for the Failure of Spot and Futures Prices to Converge at Expiration?

The term for the failure of spot and futures prices to converge at expiration is "failed convergence." While convergence is a fundamental principle, it can fail due to factors like a shortage of deliverable supply, market manipulation, or severe illiquidity in the spot market. Failed convergence represents a significant market inefficiency and a major risk for arbitrageurs, as their guaranteed profit disappears or turns into a loss.