Hi Volt,Personally I tend to regard futures as being a vehicle...

Hi Volt,


Personally I tend to regard futures as being a vehicle used by the v large players as a hedge agains equity positions... having worked on the software that 90% of large fund managers in Australia use I know that the fund management software has specific functionality to enable the fund managers and their minions to use the futures as a hedge. Those fellahs are big on their hedging strategies.

As such and when viewed as a hedgeing instrument used by large conservitave players, the premium -ve or +ve to the cash market makes loads of sense to me, as one could expect a shorting hedge by a large fund to bring the spi down if hedging against long equity positions, and vice versa to bring the premium up when using the futures as a long hedge against short equity positions.

Ultimately though, It probably comes down to how we want to view the market and its players. The psychological tricks and means we use to position ourselves favourably are going to come down to personal tastes and mindsets...


;)