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To: Nemer who wrote (50161)	8/18/1998 1:22:00 PM
From: Lee	Respond to of 58727

Hi Nemer,..Re:<<PREM>> Also, since only the futures are traded in Globex, PREM has no basis after regular market closes, similar to tyx which closes with the NY bond at 4 pm? Regards, Lee PS Picked up 6 ticks on a quick bond short Friday - 124 U put.

To: Nemer who wrote (50161)	8/18/1998 1:24:00 PM
From: Electric	Read Replies (2) \| Respond to of 58727

Nemer, Interesting take.. My 2 cents on the topic. What you are saying is correct if the SP8U trades higher at the open, enough to cover the lower close. What if the futures are negative? How does that change your senario? I think you are right about the buying of the cash to settle accounts, like they were short for the day and are closing? That sounds plausible in this market setting. One other thing.. The degree of the sell-off is in relation to those buying the CASH at close, so maybe the degree of the decline gives an indication of what percentage were short? (I am assuming short, or inbalanced in the futures contract?-- not sure on that part) And in normal contidions, the PREM closes relatively close to CASH when there are less shorters? And it closes up when there are more longs? What are the rules of keeping the contract on the futures or cash open then? Do all have to settle, because I know that isnt the case for traders that do it here, like TT and Pat, although they trade futures. More confusion? I hope so... :} What I need is a scratch golfer as a best friend, to straighten me out... or somthing..

To: Nemer who wrote (50161)	8/18/1998 6:34:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

<is lower the next day to reflect the reduction of time value> Yes, you do have some decay. What I have been watching is the flight to cash...real cash...after the Cash closes and so a dip in the PREM. But that is meaningless as the overnights boost or decay the spoo position while the Cash stays firm. So as an end of day indicator all one really sees...to my way of thinking...is that if the PREM narrows it is a general lack of confidence in the market. Right or wrong, people just don't trust the sonuvagun.