Equity index futures
What is the Fair Value calculation and how does it predict opening equity cash market gaps?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Fair value is a calculated futures-implied price estimate used to predict where the cash equity market may open relative to the prior close.
How it works
It factors in the futures premium or discount, dividends, and interest rates to project the cash index open versus futures price.
An example
Futures trading above fair value often implies a higher cash market open.
Risk & limitations
Fair value is an estimate, not a guarantee of actual market open behavior.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.