1, premium: when the futures price is higher than the spot price, this situation is called futures premium. Premium may occur when the market supply is sufficient, investor demand is weak, or the market is pessimistic about the future trend. Investors buy premium futures contracts in the expectation that the future futures price will be lower than the target index price, thus realizing investment income.
2. Discount: When the futures price is lower than the spot price, this situation is called futures discount. When the market supply is insufficient, the investor demand is strong, or the market is optimistic about the future trend, there may be a discount. Investors buy discounted futures contracts, expecting future futures prices to exceed the underlying index prices, thus realizing investment returns. Premium and premium reflect the market's expectation of future supply and demand. The premium market can be understood as an oversupply situation, which means that demand exceeds supply.