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PREMIUM / DISCOUNT

Futures are moving above spot to premium, below to discount.

Published by The Retail Trader · JUL 31, 2026 · Derivatives (F&O)

Premium / Discount — Futures moving above spot to premium, moving below to discount.

WHERE THIS FITS IN

This term comes under Derivatives (F&O), in the section "FUTURES". Futures are simpler than options — in one line: you are talking about direction.

RELATED TERMS TO READ

Other terms in this group — understanding them together is more useful:
• Futures Contract
• Long Futures
• Short Futures
• Spot Price
• Basis
• Cost of Carry
• SPAN + Exposure Margin
• Mark to Market (MTM)
• Margin Call
• Contango / Backwardation

To read the entire group and all its examples in one place, see the journal "DERIVATIVES: DICTIONARY OF FUTURES & OPTIONS" - this term has been taken from there.

This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.

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