DOW and FTSE100 futures prices

grubs50

Well-known member
408 0
Can anybody please explain to me why the DOW futures prices seem to be always less than the DOW price while the FTSE100 futures prices seem to fluctuate (sometimes higher and other times lower than the actual FTSE100 price). Or maybe i have just got everything confused......lol!!!
 

stevem12

Active member
135 1
Also depends how close to expiration a contract is, the nearer to its end the closer it is to the cash. eg YMM currently 3 above cash, YMU03 18 below cash.
Steve
 

grubs50

Well-known member
408 0
so even the case of the DOW it could the futures price could get higher than the cash price?
 

stevem12

Active member
135 1
People a lot smarter than I (who isn`t) have highly complicated formula for valuing futures and options. They can be above or below the cash, depending on general market perception of where prices will be at expiration, but its not an indicator to use in trading as values of futures have more to do with interest rates, and bond rates.Which they need to discount otherwise a buy and hold on a futures contract would always work.
Options prices have a hugh time value which decays toward expiration.

On that note isn`t it triple witching next week?
Steve
 
 
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