What causes the difference between the value of index and index future at any given time?
here’s the example from today:
Because they are different products. And price is simply the point where a buyer and seller of that product agree to change hands. A future may be available at discount or premium. And an index is typically computed via weightage average market capitalisation of underlying constituents of the index.
BANKNIFTY JUN FUT as the name suggests, is the future price of BANKNIFTY lets say on Jun 28th (FNO expiry date)
If market participants feel BANKNIFTY will fall further, then its FUT will be quoting lesser and vice-versa
This is just for understanding purpose
Otherwise practically, as Risk.Money told its just the price which the buyers and sellers agree to pay for it. And they may have set thinking how BANKNIFTY will perform in future, which may or may not accurately come into the price of BANKNIFTY JUN FUT.
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