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how are futures more fair over stocks?

in what way does a market maker in stocks have more power over market makers in futures? and why?

but at expiration... if ES is still worth 800 and SPX is worth 805... it's as though I bought ES and sold it at the SPX price level at expiration.... so despite if there are arbitragers or not after expiration, futures is forced to settle at cash. I would think those additional cost you...

okay :) so now I see a correlation between ES and SPX... I never saw how they had anything to do with each at the beginning... so basically, the system forces the futures contract back to the price despite if there are arbitragers or not. I wasn't clear on this at first.

wait.... just to clarify... so if I bought ES today at 800....and SPX is today 805.... and it stays the same all the way upto the expiration date... if I don't sell and instead let the computer automatically close my contract, I will be getting the 805 back since that's the value of...

can you please elaborate on this... For some reason, I find trading index futures more predictable than trading the cash... I've made 130% in the last 2 1/2 weeks. I know that's hard to believe, but that's why I'm trying to get to the bottom of this. It really pays to be curious. I'm a...

OHHHHHH! thank you for all those people patient enough to help me out with this.... You don't know how much it means to me to know this information... thanks again everyone!!

So you're saying that if I bought 1 ES contract right now... it will automatically be converted to the value of SPX even if I didn't choose to sell it on the expiration day?

I don't quite understand how arbitrage is risk-free money... say if ES was 800 and SPX was 805... If I bought both ES and SPX.... what's to say that they won't just drift apart in price since they clearly don't affect each other? You mentioned that it's a benefit to have things cash...

I don't mind taking the heat for being curious... it's all good

i guess i'm not being clear here... I understand that futures and stock converage at the time when the futures expire... but when you trade say the ES, unlike options... you aren't obligated to deliver 500 stocks to the person who is buying the contract from you. Correct me if I'm wrong...

Thanks for that explaination.... but can you give me an example of using ES (S&P futures)? how would you buy ES and then sell that in cash (SPX)?

Can you please elaborate on what you said "You buy the futures contract and sell it on the spot market the next day when you take delivery. Any difference in price is pure (and free) profit." How do you actually buy the futures contract and sell it on the spot market?

but how does a bid and ask price get created if there are unlimited supply of contracts that can be created... it's not like stocks where there is a limited supply which causes the round of stock prices to move up starting with the lowest priced stock.

some people just seem to know everything...

how is the lowest offered prices created though???

i guess the real question is, how does globex create a bid and ask prices? So if there is no market maker but there are arbitrager... are they forced to bring the spot and futures price together (are they hired to do this)? I was reading this up on investopedia.com...

I thought I read there was a market maker in futures in any case, how are these price(s) determined (bid and ask price), when there are unlimited amount of contracts that can be created and both sides hit the the buy/sell market price button?

but a lot of people buy the "market price"... in stocks... say you have stock XYZ that has 3 shares total at $10 each... because there are only 3 shares.... it would look something like this... first bidder will get share number 1 at $10 second bidder will get share number 2 at $10...

Who creates these contracts? Is it the buyers and sellers or is it the farmers/producers of the commodity? If someone could clear things up...I guess I had a misunderstand that needs to be cleared up...basically what you are saying is that when I buy a contract and then sell it...I have...