Nifty Futures Contract’s Value vs Nifty Spot Value

Update (05/08/2018): I had posted this very early into my trading days. Back then, I had various misconceptions about the markets and the way it moved every day. The article listed below does not convey my current thoughts about Nifty Futures contract and Nifty spot value. Thanks.

Ever since I began trading the nifty futures contract, I began to notice an anomaly. I am certain that many among you – at least the ones who follow a proper trading system may have noticed it already.

I wish to jot down some lines about the difference in value of the nifty spot and nifty contract. At times, the difference will be ten points. Sometimes, it becomes five or fifteen. I have often wondered who controls this difference of points. Yes, I have heard that the call / put options determine the differences. However, I feel that there is more to it than this simpleton explanation.

Why is this posing as a problem for traders such as me? I will explain it; I am someone who firmly believes that markets are not random occurrences. Yes, most of you have this notion. But, the markets are controlled by certain universal factors – similarities that can be found in anything and everything in our solar system.

Renowned traders as well as the novices may have heard about W.D.Gann. It was he who realized this unanimous nature of any traded commodity / stock / index. Based on certain tried and tested formulations, he came up with an innovative trading system. This, as we all are aware of, helped him to dominate the Wall Street for countless years.

I am someone who follows his principles. I will tell you why. At the time of this post, the value of the nifty futures contract is 5472.30, while that of nifty spot is 5464.95. Allow me to pose a question to the readers – 5472.30 to 5464.95 is a wide range. Can anyone tell me which is the most accurate point of interest in between these range of numbers? In other terms, which is the price point where you can see the value of the contract / nifty spot slowing down to catch a breather? The majority will respond – how is it even possible to predict such a value? Take it from me, fellow traders, that it is very much indeed possible to find that figure – it is none other than 5468.75.

You see 5468.75 is a major decisive point according to gann sciences. If the value of the entity being traded is below 5468.75, then it is a sign of bearishness. If the value is above 5468.75, then it shows that there is some bullishness to the entity. Now…I have already mentioned two values prior to posting this magical value (5468.75). They were 5472.30 (the value of the nifty futures contract) and 5464.95 (the value of the nifty spot).

If you were paying attention to these three values, you may have already noticed the anomaly. The contract is trading above 5468.75 while the nifty spot is trading below it. In other words, the contract is showing signs of bullishness while the nifty spot is displaying weakness. Which one will you follow?

If you ask me, this difference in value in between the spot and futures contract is the primary reason why we are seeing immense levels of volatility and sharp / rogue movements within the market. This occurs because the nifty spot value will try to respect 5468.75 value by staying below it. While the other counterpart will try to surge higher. A tug of war results and this causes an infertile environment to day-trade!


About Praveen Pious Francis
A part-time blogger who has a wide range of interests including investing in the stock markets across the globe and broadband technologies in India.

One Response to Nifty Futures Contract’s Value vs Nifty Spot Value

  1. TANIK says:

    try following links for live stock/Nifty EMA crossover signals

    EMA 13 34 55 used for signals

    For nifty signals open directly

    change NIFTY to any other script for signal of that script

    ex:For signals of state bank of india just change script name


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