How do US Index futures derive value if underlying index is closed overnight?

[schizo]

Some may use technical analysis, others might use fundamentals while others in the market might just be taking advantage of short-term momentum. Hell, there may be people placing trades based on the moon phase or zodiac signs.
BTW- If you are drinking a lot schizo you might want to look into using Milk Thistle as a supplement.
https://www.webmd.com/digestive-disorders/milk-thistle-benefits-and-side-effects

C'mon, you knew exactly what I was after (and this ain't it).

 

[wartrace]

C'mon, you knew exactly what I was after (and this ain't it).

I apologize if I offended. Someone else asked if you had been drinking and I just suggested the supplement in case you drink. I am afraid I am too stupid to know exactly what you were after.

 

[SunTrader]

After the US Equity market closes, for example, until next day open, just curious to understand on what basis are US index futures deriving there value?

Is it based on news events, if any? Or are they mainly deriving value based on how other major world indices open at the time are performing?

Thx

As simple as "Money never sleeps".

If you are too young to get it , google it.

 

[mervyn]

Overnight news and events mostly, money never sleeps, Asian and European traders are determining the price, they are equally smart and active.

 

[Businessman]

After the US Equity market closes, for example, until next day open, just curious to understand on what basis are US index futures deriving there value?

They trade based on supply and demand.

However if the overnight futures didnt trade, there would still be some sort of gap open most days in the cash index.

So the overnight futures are the markets best estimate at any time on what the opening gap in the cash market will be.

 

[SunTrader]

Indexes also gap most days ... because not all the constituent parts are open exactly at 9:30am for various reasons.

 

[Scataphagos]

So the overnight futures are the markets best estimate at any time on what the opening gap in the cash market will be.

Yes... and based mostly upon the reaction to "overnight news/developments" which in the minds of players might affect price. That is... some positive news overnight from anywhere, and the futures likely to bid up.. vice versa for negative news.... Japan, China, Europe raised/cut rates... loosened/tightened reserves... money-pumped into their system, etc. And of course AH reaction to earnings reports/guidance from important companies.

 

[Frederick Foresight]

But then again, just what is that based on?

A proprietary blend of expectations, hopes, dreams, fears, shits & giggles.

 

[schizo]

A proprietary blend of expectations, hopes, dreams, fears, shits & giggles.

As you might already know, I only follow what I see on the chart. Nothing else matters. Everything else is like you say: proprietary shit.

 

[Overnight]

After the US Equity market closes, for example, until next day open, just curious to understand on what basis are US index futures deriving there value?

Is it based on news events, if any? Or are they mainly deriving value based on how other major world indices open at the time are performing?

Thx

It is called speculating. It is why stocks open gap up or down at the Wall street bell in NY every trading day at 0930 hours ET.