Premium/Discount high water, also known as premium, usually means that the futures price is higher than the spot price. Take the futures index (namely Hang Seng Index) as an example. If the futures index is higher than the Hang Seng Index (namely Hang Seng Index), it is called high futures index. If the futures index has a high water level, it will generally be considered as a good indicator of the market outlook, because investors in the futures market are willing to buy the futures index at a higher price than the spot market, indicating that investors have confidence in the market outlook. Low water, also known as discount, means that the futures price is lower than the spot price. Take Hang Seng Index futures as an example. If Hang Seng Index is higher than futures index, this situation can be called low futures index or discount. We should know that futures refers to a special product. It determines the price now, and it will be settled on the future contract expiration date (that is, the settlement date at the end of each month). On the settlement date, the futures price should be equal to the spot price, and the spot index should be equal to the HSI, so the current price of the futures index is basically an estimate of the closing price of the HSI on the future maturity date. Therefore, if the futures index is low, it means that investors estimate that the Hang Seng Index will fall in the future and the market outlook will be weak.