How can a contract move with volumes of 0? Okay, I had learned that the volume of buyers vs sellers make the movement of an asset. However, on a future contract like BIO (E-MINI NASDAQ BIOTECHNOLOGY) varies enormously while the volumes are at 0. What brings me to the conclusion that a derivative like the future follows its underlying regardless of the volume quoted long or short? Am I wrong ?
I expect you are refering to daily settlement prices. For more info on how these are set (also in the event of no trading): https://www.cmegroup.com/confluence/display/EPICSANDBOX/E-mini+Nasdaq+Biotechnology+Futures
A quoted price does not need volume. I.e., you can have a price without volume. But you can't have volume without a price.
Last TRADED price cannot change without volume. A trade has to be executed for a new print. But "quoted price", the bid and ask, can move just by placing and especially pulling orders. Thats how you get those huge gaps, especially around (economic) news announcements.
It's a great idea to study a futures contract exchange specifications and settlement procedures details. I quote: "If a two-sided market is not available on Globex during the closing period, then the cash index will be used in the following Carry calculation to derive a settlement price."
%% Exactly. Its like a real estate contract; any, can ask any asking price /LOL or any listing price , no volume necessary. Certified/ bank approved appraisers use [3 or more]comps+ are based on proven bid prices/closed prices. In derivatives or RE , the lower the volume , the less reliable\less accurate the price is. I'VE see WSJ \CA| RE one property listed @ 129 million/+ , 52 weeks later ''reduced,LOL'' to $100 million+/....................................................................................[No volume, just asking price]
All of these cash settled futures index contracts are going to be based on an analog market which provides a fair settlement procedure (in this case, an equity market NASDAQ licensed Index).
%% Partly right t221+ lets assume you looked @ 2 different data providers + got it right.OK. Its like the commercial /retail gasoline market. Thought it would be like/ T Boone Pickens climbing up the price pole + raising the bids [hurricane hydrocarbon patterns], as he did, as kid. BUT gasoline price stayed the same + sales+ ask price price came down in some cases. WMT [MUR]gives a gasoline cash discount[+gift card discount] so MUR cashprice= always cheaper than credit price; another local dealer does the same.....................................................Some auto dealers/ loggers have a 52 week+/ fuel contract, so it can vary even more.