OPEN-SOURCE SCRIPT
Nifty vs Nifty Fut Premium indicator
This indicator compares Nifty Spot and Nifty Futures prices in real-time, displaying the premium (or discount) between them at the top of the pane.
Trading applications:
Trading applications:
- Arbitrage opportunities: When the premium becomes unusually high or low compared to fair value (based on cost of carry), traders can exploit the mispricing through cash-futures arbitrage
- Market sentiment: A rising premium often indicates bullish sentiment as traders are willing to pay more for futures, while a declining or negative premium suggests bearish sentiment
- Rollover strategy: Near expiry, monitoring the premium helps traders decide optimal timing for rolling positions from current month to next month contracts
- Risk assessment: Sudden spikes in premium can signal increased demand for leveraged long positions, potentially indicating overbought conditions or strong momentum
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.