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Nifty vs Nifty Fut Premium indicator

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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:
  • 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

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