Futures

Can you use the current value of the SPI 200 as a guide to where the market is heading next?

In the same way as the price of a CFD tells us nothing about the direction of the underlying stock (share), if priced efficiently, the futures price tells us nothing about the market expectations of the underlying SPI 200. In reality, the price of the SPI 200 is simply a financing trade; the spread between…

What do I need to take into consideration if I short the ASX200?

Question: Hi, with the market going down shorting the ASX200 or other indexes must be a popular move. What do I need to take into consideration if I do this, and are there any strategies I can employ when shorting the index? Response: Since the global financial crisis, short selling has grown in popularity with…

Why do futures prices converge on spot prices during the delivery month?

Prior to expiry, the price of futures contracts will most likely either be at a premium to the physical or a discount. As the contract approaches expiry these two prices will converge, or meet. Why does this happen? There are a number of factors involved here; one of the main reasons is what’s called cost…

Can the futures market predict if the Australian sharemarket will open higher or lower?

Investors use the futures market to predict whether the Australian sharemarket will open higher or lower on a daily basis. This can be achieved in several ways including reviewing offshore futures contracts, in markets like Europe and the United States to see how particular stock indices, including the FTSE and the S&P500 traded overnight. In…

What futures contracts are the most popular and who buys them?

Futures traders normally fall into two groups with each having a typical ‘holding period’, based on the purpose of that futures position. The first group of traders, hedgers, have an interest in the underlying commodity and are seeking to minimise price risk in the physical market. Farmers are typically hedgers, and normally hold positions from…

Why do futures prices converge on spot prices during the delivery month?

Why do futures prices converge on spot prices during the delivery month? Prior to expiry, the price of futures contracts will most likely either be at a premium to the physical or a discount. As the contract approaches expiry these two prices will converge, or meet. Why does this happen? There are a number of…

Best Resources & Offers