How are the Daily FTSE and Wall Street prices calculated?
This is a common question for SB companies as it does cause some confusion with clients. All major indices quoted by Capital Spreads have a Futures market related to them (i.e. the FTSE 100 has the LIFFE FTSE Futures market). This Future trades at a price which reflects the underlying market plus some adjustments. These adjustments are calculated from the theoretical value of dividends payable between today and the expiry of the Future AND the cost of carry for the index over the same period. This Adjustment is called the ‘Fair Value’. Capital Spreads will adjust the Daily Cash price of each index by it’s own Fair Value number each day. Capital Spreads links the ‘Daily Cash’ quote to the relevant future concerned and offsets the quote by the current Fair Value. Therefore the Cash Daily price is moved by the Futures price and not vice versa, this is because the cash price is a lagging market indicator which does not react in a timely manner to market moving news.
This is a common question for SB companies as it does cause some confusion with clients. All major indices quoted by E*TRADE Spread Betting have a Futures market related to them (i.e. the FTSE 100 has the LIFFE FTSE Futures market). This Future trades at a price which reflects the underlying market plus some adjustments. These adjustments are calculated from the theoretical value of dividends payable between today and the expiry of the Future AND the cost of carry for the index over the same period. This Adjustment is called the ‘Fair Value’. E*TRADE Spread Betting will adjust the Daily Cash price of each index by it’s own Fair Value number each day. E*TRADE Spread Betting links the ‘Daily Cash’ quote to the relevant future concerned and offsets the quote by the current Fair Value. Therefore the Cash Daily price is moved by the Futures price and not vice versa, this is because the cash price is a lagging market indicator which does not react in a timely manner to market moving news.
This is a common question for SB companies as it does cause some confusion with clients. All major indices quoted by FinancialSpreads.com have a Futures market related to them (i.e. the FTSE 100 has the LIFFE FTSE Futures market). This Future trades at a price which reflects the underlying market plus some adjustments. These adjustments are calculated from the theoretical value of dividends payable between today and the expiry of the Future AND the cost of carry for the index over the same period. This Adjustment is called the ‘Fair Value’. FinancialSpreads.com will adjust the Daily Cash price of each index by it’s own Fair Value number each day. FinancialSpreads.com links the ‘Daily Cash’ quote to the relevant future concerned and offsets the quote by the current Fair Value. Therefore the Cash Daily price is moved by the Futures price and not vice versa, this is because the cash price is a lagging market indicator which does not react in a timely manner to market moving news. For UK s
