SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Canadian Options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: B. E. Barry who wrote (969)4/7/1998 5:43:00 PM
From: Dave.S   of 1598
 
To B.E. and Beach:

B.E.:

The Bombardier options (BBD.B) are listed on the Montreal Stock Exchange. Try their web site for the quotes you require.

Beach:

Fair value on the Futures is a fairly complicated concept and one needs a computer model to compute it. For example the S&P is now trading the June Futures contract which expires on June 19, 1998. If you were to hold a "basket" of stocks which is equal to one future contract you would receive the dividends payable by the 500 companies in the index. If you were to buy a futures contract and put the $550,000 US (which you would require to hold all the stocks for the 3 month period) into Treasury bills, you would receive interest on this position. The Fair Value calculation takes these dividend and interest factors into consideration.

The Program trades kick in when the Futures contract exceeds the Fair value (sell program) by a certain amount allowing a risk free profit. That is the trader sells the basket of stocks and buys a Futures contract locking in a guaranteed profit which is unwound at the expiry (that is he buys the basket at expiry). The same applies to buy programs if the index is below Fair value by a certain amount.

You have to trade Index Futures for awhile before these concepts become completely understandable.

Dave
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News