As an example Dec futures were quoted as 9725 and March futures were quoted as 9698- lower than the dec futures. Does this mean anything. Is market expected to fall between Dec and March? Why is there a difference? Can one exploit this dofference? Thanks
Difference between prices between 2 futures expiries consists of 3 factors:
1. interest rates. Remember a future is a obligation to deliver/receive a basket of stocks which will need to be financed. Therefore, cp other factors the march future would be at a premium over Dec,
2. Dividends. The march fut doesnot include divs paid between dec and mar expiry which puts the price of March contract at a discount, and
3. temporary supply and demand factors.
While i don't have data for the above, you should assume that professional participants can easily hedge 1 & 2 and will actively use cash/futures arbitrage techniques which will usually ensure that 3. is virtually non-existent.
So, in summary, the answer is NO. As a rule of thumb, there ain't no free lunches in financial markets and especially not in the major asset classes. I would recommend to buy a book on futures trading (see book store in T2W Resources tap)
I hope above was of help.