Friday, May 13, 2011

Cast of Carry on Nifty Futures

Market opened at flat in the morning at 5480 levels, But as the news of Left thrown out from kerala and WB Market reacted in a positive way and moved till 5560 till 12:00. With Europe Opening in Positive and News of interviews related to more Reforms led the market to cross 5600 Levels and after more than one week NIFTY quoted at 15 points premium to Spot, which is good sign that people are buying.

By 3:00 Traders started to exit there positions to gain from 100 points rise and market cracked a bit , but what is surprising is the premium at which NIFTY is Quoting to SPOT at close

Nifty Futures were Quoting at 5580.85 at close while Spot is 5540 a 40 points premium which is never seen by me .Does it mean Market will go up in coming days? lets see how it unfolds in coming days.

But what is surprising more is the Cost of Carry which is at 8.1 which led me to this post

Theoretically The Futures Price = Spot Price + Cost of Carry.

Looks like Theory is thrown in dustbin for today :)

Will post more once my blogger is up

Pradeep Reddy Lekkala

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