Let’s assume that short covering happens in futures which drives the futures price up. Now, there is a concept of fair value of a futures contract and when the futures trades at a price greater than fair value, it gives arbitrage opportunities. Arbitrage here would be to short futures and buy in cash, until no more arbitrage is possible.
Market makers ,BOTs, Algos, Arbitragers,HFTs makes the price move and make the balance when there is imbalance in price on options, fut, cash. Every thing is interconnected. These happens in nano secs . 60-80% of trades are Automatic .So everything affects every other things until balance is maintained. Don’t mix or miss interpret with fut discount/premium( thats also imbalance caused which can’t be filled but its filled over the period till expiry)
Yes, even big guys have complex hedges in order to avoid deltas (slippages) . if they are buying in fut they will have hedges in options or cash or they will simultaneous buy equal quantities in fut and cash or in ratios in order to avoid slippages. Every slippages and price discrepancy is loss of big player and gain of these Arbitragers , HFT , Bots , Market makers etc. Hence to avoid such slippages they themselves have hedges which compensates these slippages.
Nothing matters who’s doing what, or whatever news bullshit etc,… the chart says it all, study/backtest/follow your rules and have proper SL/money/position management, everything else will fall in place.