Z, the S&P futures quoted on CNBC before the open are basically the same as the S&P futures shown on Globex.
Technically, I don't know if these are the same, exact futures being quoted. What I mean by the same, exact futures is that you can get a price for a few stocks, and the source might be the Pacific Coast Stock Exchange, OTC, or the NYSE, or, what's the term, instanet.
But the same stock can be traded on the NYSE, OTC, and the Pacific Coast Stock Exchange (or some other regional stock exchange.)
The trading price for the stock at the different markets should be close to one another, although not necessarily exactly the same. Usually you get a slightly better price (in your favor) at the NYSE rather than at a regional exchange like the Pacific Coast Stock Exchange.
Sorry for the digression, but I'm trying to say I don't know precisely if GLOBEX2 is the source of the CNBC quote. If it isn't the source, the GLOBEX2 figures should be very close to what is being quoted on CNBC. Close enough to make no difference in price, as far as we're concerned. Especially considering the volatility of these makets.
There is also (this last year) a Dow Jones futures that trades. I guess Dow Jones finally decided to start competing with S&P to grab some of the money floating around for licensing fees, etc.
The S&P 500 futures, or the Dow futures, are only an indication of where the stock market should be trading at. And these futures are just as volatile as the market.
But the professionals (mutual funds, hedge funds, brokerage houses) can buy or sell these futures to hedge their stock positions, long and short. So, in theory at least, the near-term contract should be swinging around in price that approximates the current S&P (or Dow Jones) market price, plus a small premium for the time value of the contract.
If the futures contract goes below the current market price, either the current market price will drop, or the contract price will rise. The two have to stay in a sort of equilibrium (while they are both trading). But when the market is closed, and the futures are trading on their own, they are supposed to indicate where the market will open.
The last time I checked, the S&P futures indicated that stocks should be moving up.
But the truth is, the market can move up at the open, be down 20 minutes later, and who the heck knows where it's going to be after that? As far as CNBC, it's just one more thing to talk about. But lately, at least, I've often seen the futures down sharply at the opening, and then the market just goes swinging around all over the place.
Or when the market is indicated to open sharply higher, great, but how long does that last?
The truth is, the market can swing all over the place. The futures indicate the general opening price, but the opening price doesn't hold very long.
Regards,
Larry
(Technically, the opening price is really a gradual opening price, because a lot of the DOW stocks open for trading on a gradual basis, they almost never all open exactly when the market is officially opened at 9:30 am EST)
(There are also NASDAQ futures, etc.)
(I kept writing because I was trying to say something useful. But if there is actually anything useful in here, you will have to find it yourself. It's really more on the lines of interesting if you don't know it yet, but of little use once you do know it.)
PS: If you are still interested in closed-end funds, this week's Barron's mentions that many closed-end funds are trading at unusually sharp discounts.
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