Why is the current price of banknifty future june series underpriced by nearly 50 points

Hi Rebeck10…I’m assuming you have used a theoretical fair value estimate to arrive at this conclusion of Bank Nifty being mispriced…

Few things that I can think of…

  1. Your interest rate estimate may be different

  2. There could be effect of dividend which you may have missed

  3. Assumption on time rule convention such as - actual/actual, actual/360, 30/360 etc could vary between the market and you

Now assuming you have factored in all these variables correctly, a 50 point under pricing on Bank Nifty works out to a third of a percent, which practically is negligible when you consider liquidity, transaction costs etc.