High water, also called premium, usually means that the futures price is higher than the spot price. Take the Hang Seng Index as an example. If the futures index is higher than the Hang Seng Index (the Hang Seng Index), it is called a high futures index.

If the water level of futures index is high, it will generally be considered as a good indicator of the market outlook, because investors in the futures market are willing to buy futures index at a price higher than that in 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 the Hang Seng Index is higher than the futures index, this situation can be called low futures index or discount.

You know, futures refer to a special product. It determines the current price and 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.