Fair Value

Discussion in 'Trading' started by rcanfiel, Feb 22, 2007.

  1. Has anyone tried to make some anticipation based on daily changes in Fair Value (futures over underlying index?
  2. It's possible but very tough. Keep an eye on the larger dividend payouts and Fed Funds rate changes.
  3. Of course...the PREM/DISC to FV is fundamental to all trading decisions, ever since they started trading Spoos.

  4. When people act like "what a stupid question, of course..." without any particular defense, reasoning, or example(s) - it is hardly a helpful thing.
  5. Not my intention at all...sometimes these threads misinterpret tone...sorry if it came off that way. I have answered similar questions many times, but here you go....

    Traders on the Floor of the CME and other institutional futures traders will sell Futures when they show a "PREM" to fair value, and if they can't buy them back, they often times buy all the underlying stocks, and vice versa with "DISC" to fair value - a great leading indicator for equity traders.


    All the best,