Emini Premium-what causes the extreme spikes

C

cee gee

I've been watching the ES Emini Premium and was wondering what causes the extreme spikes either to the upside or the downside. Is it funds flooding the market with orders or program buying kicking in? And is there a way to tell if it's buyers or sellers? I'd appreciate any positive explanation and breakdown of what causes the extreme spikes.
I've read what the Premium is, but just can't seem to get a grasp of how and why it reacts the way it does. Thanks in advance for any contributions.
 
cee gee said:
I've been watching the ES Emini Premium and was wondering what causes the extreme spikes either to the upside or the downside. Is it funds flooding the market with orders or program buying kicking in? And is there a way to tell if it's buyers or sellers? I'd appreciate any positive explanation and breakdown of what causes the extreme spikes.
I've read what the Premium is, but just can't seem to get a grasp of how and why it reacts the way it does. Thanks in advance for any contributions.
More...

The ES's reaction to news is displayed more quickly than the SPX can be reflected on the tape.
 
Thanks for the reply's. Is there anyone who is using the premium to determine trade direction? In other words, if the premium spikes to the upside, is that a trigger to go long the ES?
And is that due to Buyers coming into the ES market?
 
ES liquidity and volume is probably more important, but they're all technically one and the same, they move together. As far as buyers and sellers, some software let's you know whether the sales occurred at the bid or the ask.
 
cee gee said:
Thanks for the reply's. Is there anyone who is using the premium to determine trade direction? In other words, if the premium spikes to the upside, is that a trigger to go long the ES?
And is that due to Buyers coming into the ES market?
More...

It can be a large buyer/seller in SP or ES first, or it can be from baskets of stocks being executed that you can't see in the indexes yet, but are be hedged with futures.

I don't expect there are any ways to profit from this as a retail trader. If you can find one, go for it.
 
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