[darthtrader]

so does anyone use PREM still here? I remember soultrader had it on his videos but I didn't really get it then.
I've been watching the fair value levels from indexarb all morning on YM and S&P PREM. I almost want to say those levels are kind of bogus. 3 hours in and the PREM has not hit the level they gave any probability of program trading to yet on either direction. If programs are such a high volume of the total market that makes no sense at all. I almost wonder if their formula hasn't accounted for the dramatic increase in program trading in recent years.

Something interesting from watching the tape this morning is when PREM started moving up, once it hit its peak above 2 you seen the tape go crazy and a fast 20 point move up, closing and prem go back to being flat. I would think that was basically programs arbing the ES/cash and then arbing on the YM/cash dow to keep everything in line. If that was the case then PREM should be a pretty nice thing to watch. Especially if your looking to counter trend trade, doesn't make much sense to be on the wrong side of PREM if the programs are going to come in and blast you with heat on the otherside to close the gap with cash.