Set 50 Future

[Edonista]

Today was my first day as future trader.

For most of today the Set50 future due in June traded with a premium of about 1% compared to the index SET50 itself. Considering interest rates are about 4% and the contract is due within 1 month I cannot see any reason for such a spread (it should be a mere 0,3%).

Any clues ?

[Irene]

Today was my first day as future trader.

For most of today the Set50 future due in June traded with a premium of about 1% compared to the index SET50 itself. Considering interest rates are about 4% and the contract is due within 1 month I cannot see any reason for such a spread (it should be a mere 0,3%).

Any clues ?

The market is not that perfect yet. Only about 1,000 contracts concluded daily. There are not that many players not even among institutions. The premium and discount are based on the emotion of this small group who is also groping to understand the working of this market. This is not the US future in which the market is so perfect.

Only last week before the court's judgment on Thai Rak Thai the June edition was traded at a discount of 1%. The variance is so fickle that one just takes it as a rough expectation at that moment of time. To play future in this market, your inclination of the future in a few month time is more important than the momental differences. From my experience, I tend to accumulate when there is a discount since I believe the SET index will rise over 780 by the next September quarter because of expected cooldown of political turmoil. Hence, picking the September series is my current policy. If there is a premium (at one time reaching 2% range), I tend to be on alert in closing.

Cheers!