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Strategies & Market Trends : Tech Stock Options

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To: Tom Trader who wrote (30496)	12/6/1997 11:58:00 PM
From: MonsieurGonzo	Read Replies (1) of 58727

TT: RE:" Futures Lingo..." ...I'm not an expert, either, Tom - but I have some experience with the Aluminium futures traded on the LME over here in the EU. When the futures are selling at a discount to present cash value, they call it a backwardation; the other way around is called a contango ( I think I got it right {grin} if not, please correct me, someone ). I've never heard this lingo used outside the London Metals Exchange, but the concept seems universal. Perhaps you can help us all to understand the concept of the SP7Z trading "above" or "below" fair value. Is this value a kind of "perceived" thing by Futures Traders, or something that has a set of rules associated with it ? Then, how is fair value known for other indices, such as the DJX or other, futures : index options organized derivatives ? -Steve

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