Discount refers to the situation that the forward futures price is lower than the recent futures price and spot price, and premium refers to the situation that the forward futures price is higher than the recent futures price and spot price. Discount and premium are two types of forward price difference. In direct quotation, premium represents the depreciation of local currency and the appreciation of foreign currency; In direct quotation, discount represents appreciation of local currency and depreciation of foreign currency.

Under normal circumstances, as the delivery date approaches, the price difference between futures and spot will narrow. If the price difference between futures and spot is too large to generate arbitrage space, investors can profit from arbitrage, and the arbitrage behavior of arbitrageurs will also narrow the arbitrage space, thus narrowing the price difference between futures and spot.