Why may future is different than June future.what to know the logic . In what case current June future falls but still may future increases.
The reason for difference is because of
- Theoretical price
futures = spot + cost of carry. Cost of carry for a contract having a longer expiry date is higher.
- Liquidity/Demand + supply
This may differ based on current/near/far months of future.
Btw, no easy one line answers to these. Check the futures module here
Currently, lets say i expect markets to fall. So I want to buy Nifty 10000 PE.
But if you have to choose between below:
You get paid if markets will fall by May end
You get paid if markets fall anytime before June end
You will choose option 2 coz its give u more time for your prediction to happen, thats why it is pricier