Pricing futures
Stock index futures began trading on NSE on the 12th June 2000. Stock futures were launched on
9th November 2001. The volumes and open interest on this market has been steadily growing.
Looking at the futures prices on NSE’s market, have you ever felt the need to know whether
the quoted prices are a true reflection of the price of the underlying index/stock? Have you
wondered whether you could make risk-less profits by arbitraging between the underlying and
futures markets? If so, you need to know the cost-of-carry to understand the dynamics of pricing
that constitute the estimation of fair value of futures.
Stock index futures began trading on NSE on the 12th June 2000. Stock futures were launched on
9th November 2001. The volumes and open interest on this market has been steadily growing.
Looking at the futures prices on NSE’s market, have you ever felt the need to know whether
the quoted prices are a true reflection of the price of the underlying index/stock? Have you
wondered whether you could make risk-less profits by arbitraging between the underlying and
futures markets? If so, you need to know the cost-of-carry to understand the dynamics of pricing
that constitute the estimation of fair value of futures.