Futures vs. fair value

Discussion in 'Trading' started by masonbarge, Aug 8, 2008.

  1. Could somebody please explain this to me?
     
  2. Surdo

    Surdo

    http://www.indexarb.com/index.html

    "This is the "futures - spot" index premium value at which the futures and the equity markets are in equilibrium. No (profitable) index arbitrage type programs will occur at fair value nor when the "futures - spot" premium level falls within the range extending from the sell threshold to the buy threshold."