Thanks gse1963. Looks like you are right. The bottom line for me atm, is that I prefer to bet on the real market until I learn about the futures market. Anyway, here's the reply I got from IG Markets:
"Cash stock Indices are not a tradable product in their own right. For example, you can't directly buy or sell the ASX200 itself. This is because it is simply a benchmark designed to indicate how the the Australian stock market is performing. However, the ASX200 Index futures are exchange traded products, and will react much faster to economic news than the equivalent cash index.
"When we price our Indices contracts, we will therefore make a price using the underlying front quarter month future, as this is a tradeable product and is normally the most liquid contract. We use the front month contract to make both our daily price and our futures prices. In order to make our daily price, we will add or subtract a “fair value” from the futures price. The fair value reflects interest advantages and the disadvantage of foregone dividends. We also price our Future contracts, with the exception of the front (or nearest) quarter, with a similar fair value adjustment .
"For our front month contracts, we simply wrap our spread directly around the market price, there is no fair value adjustment. For example, when the June ASX200 future is the near quarter, we would simply add our spread to the underlying market price.
Therefore it is possible that our highs and lows for our markets can differ from the underlying market. Clients can have stop losses triggered legitimately at levels above/below the market highs/lows."
