Day Trading Stocks & Futures

I honestly completely omitted that line of analysis.
Usually, the futures go into discount sometime in the 3rd / 4th week and the rollovers happen, then it picks up again and ends (expires) in premium.
 

afin

Mechanical Trader
Usually, the futures go into discount sometime in the 3rd / 4th week and the rollovers happen, then it picks up again and ends (expires) in premium.
I'll try to dig a bit deeper into this aspect. Thanks for pointing out :)
 

pannet1

Well-Known Member
Usually, the futures go into discount sometime in the 3rd / 4th week and the rollovers happen, then it picks up again and ends (expires) in premium.
hi timepass,

sorry if my q is naive.

for exampe:

now we are in may, so when you say futures go into discount on the 3rd / 4th week .... you mean june futures right? .... and when you say rollover happens .. you must have meant june futures .... because (may is already expired) ... so june futures pick up steam during the course of the june month and expires in premium by the end of the (june) month.
 
hi timepass,

sorry if my q is naive.

for exampe:

now we are in may, so when you say futures go into discount on the 3rd / 4th week .... you mean june futures right? .... and when you say rollover happens .. you must have meant june futures .... because (may is already expired) ... so june futures pick up steam during the course of the june month and expires in premium by the end of the (june) month.
Basically premium is the value over the intrinsic value that a future gets from the underlying. It is related with the uncertainty and expectation that the market has. Now as the time for expiry draws near (which would be next week for BN Futures-May series has not expired) the uncertainty ceases. People are clearer about where the underlying will end up and hence the premium decays. It will eventually kiss the underlying on the expiry day
 
hi timepass,

sorry if my q is naive.

for exampe:

now we are in may, so when you say futures go into discount on the 3rd / 4th week .... you mean june futures right? .... and when you say rollover happens .. you must have meant june futures .... because (may is already expired) ... so june futures pick up steam during the course of the june month and expires in premium by the end of the (june) month.
This usually happens a week or so before the expiry. The premium comes down greatly, or even goes in discount.
 
Crude may future have expired
but I dont think, they were discussing Crude
I sincerely apologise my mistake, if they were discussing Crude :)
I thought they were discussing BNF/NF and such like.

BTW, in Crude, its future only and no underlying to compare discount/premium etc (atleast in our market)
Just FYI
 

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