Dax futures vs DAX cash (spread bet)

[bullboy8]

Hi

Does anything know why the mar 22 dax futures price is lower than DAX cash? I thought there was an in-built interest rate applied to futures so making it higher than the cash price?

 

[ffsear]

Because the market is currently in backwardation

Backwardation: Definition, Causes, and Example

Backwardation is when futures prices are below the expected spot price, and therefore rise to meet that higher spot price.

www.investopedia.com

 

[bullboy8]

THank you, does that have anything to do with negative interest rates? I'm trying to ascertain the cost of carry. I know dividends don't apply to the DAX as it is a total return index so there are no adjustments made to the futures price in this respect.

 

[ffsear]

I might be wrong but interest and cost of carry I think are added to calculate the spot price. The futures price is just the price.

 

[bullboy8]

I think you are right in that the spot is derived from the futures price with some adjustment. Can you explain what adjustments apply to the DAX, i.e. what you mean by cost of carry? thank you