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Strategies & Market Trends : Tech Stock Options
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To: Esteban who wrote (30491)12/5/1997 2:54:00 PM
From: Tom Trader  Read Replies (2) of 58727
 
>>Simply stated (I hope), is there a bearish bias to the futures market based on the decline in fair value from contract inception to expiration?<<

I hope that I understand your question--are you asking that given the fact that the futures are at a premium to cash, that implies a bearish slant?? I don't believe that is the case -- if one sold a contract short and the market did nothing for the next three months thereafter, you'd be right. Most futures contracts sell at a premium to the cash -- even the gold market does, though it has been trending down. The premium has more to do with the cost of capital if one were to buy the index/gold or other commodity.

Hope this answers your question -- otherwise may be someone else can do so.
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