Futures and Fair Value -- What Does it Mean

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Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Futures and Fair Value -- What Does it Mean

Allright, enough ignorance!

When I wake up in the morning and turn on CNBC and they say Dow futures are down -40 and "fair value" is XXXXX, what does that really mean?  I figure "fair value" must mean a prediction of how futures will translate into the open of the Dow, but how is it figured and what does it really mean to say that?  I had always assumed that if Dow futures were down -40, it meant the market was betting on a 40 point drop in the Dow, but I realize now that I must have been mistaken.

Thank you.

Erik T.'s picture
Erik T.
Status: Diamond Member (Offline)
Joined: Aug 5 2008
Posts: 1234
Re: Futures and Fair Value -- What Does it Mean

Hi LYS,

If you don't get an answer here, re-post this in the enrolled member area and I'll be happy to answer your question there.

Best,

ET

 

Tycer's picture
Tycer
Status: Platinum Member (Offline)
Joined: Apr 26 2009
Posts: 617
Re: Futures and Fair Value -- What Does it Mean

deleted

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Re: Futures and Fair Value -- What Does it Mean

Done.  Thank you Erik.

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