Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Happy New Year Team! In a table for US futures, it mentions a level & fair value to give an implied open. what does the fair value mean & how is it derived? Many commentators believe the high coal price is not sustainable. What are your analyst's views on coal stocks going forward? Has MM sold the WHC? If not, what is the target price to sell? Thanks
Hi Sidney,
The Fair Value that an index is due to open, whether the S&P500 or ASX200, is calculated from their respective futures contracts.
For example if the SPI closes at 7400 at 8am we know where the ASX200 is likely to open at 10am from its “Fair Value” – this “Fair Value” which can be both a premium & discount is a calculation which takes into account future dividends before the futures contract expires, length of time until the futures expires and current interest rates
As for WHC, a stock we’ve mentioned a few times today we are looking for a break of $11 before considering taking profit.
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