Fair Value

[zxcv1fu]

Has anyone read this article:
FUTURES & OPTIONS TRADING STRATEGIES
Trading the basis: How stock index arbitrage
impacts the market
Find out how program trading and index arbitrage can affect your trading.
By David Lerman

http://www.activetradermag.com/tocs/toc0303.htm

 

[spreadem]

I see Prem as both an indicator and a definition.

By definition ... Prem = futures - cash.

As an indicator we can read Prem as a timing tool to enter/exit a position in the market. It is an indication of the relationship between cash and futures.