ASX SPI Futures

Hi Paul,

Its a bit of all your thoughts combined:

• When we say overseas investors look to be getting set via the futures it means they will buy a block of SPI and then allocate across the market, potentially over 1-2 weeks, obviously the size and time vary: note, 1 SPI contract is the equivalent to 1x8350x$25= $208,750….at 8400 its worth more etc.
• The SPI will follow our market closely through the daily trading session with premiums/discounts kept in check with arbitrage.

The first and last 15 minutes is a bit of a roulette wheel with traders far more involved:

• SPI Futures trade overnight being guided by global indices and the likes of BHP and RIO trading in London and the US. They “guess”  where the market will open locally and position themselves accordingly hence we get rapid reversion when they’re wrong.
• Its similar into the close as Futures trade after the ASX200 session end, with traders positioning themselves for overnight swings.

One of Shawn’s favourite sayings is markets form there daily high or low in the first 20-minutes of the day, its not more of a “Gut Feel” rule as opposed to back tested but its often on point which ties in with one of your observations.