Why is the Z/H ES inverted?

Discussion in 'Index Futures' started by fortunatti, Dec 10, 2010.

  1. Why is the Z/H ES inverted?
     
  2. Is "inverted" a new futures market term ?

    In futures you have contango and backwardation.

    Current cost of carry for the last 2 years has kept the index futures in backwardation.

    Read all the details at http://indexarb.com/
     
  3. Thanks for the link. Good website, a lots of info there.
     
  4. Because the dividend rate is greater than the short-term interest rate. If the futures were not "inverted" the way they are, you could earn "free money" on a hedged portfolio. :cool: