# Why is the future quote lower than the underlying?

I guess this is a simple one for experts: Looking now (12noon CET Nov 7, 2014) at the DAX ^GDAXI on yahoo finance, it says S = 9.361. The Future FDAXM5.EX quotes F = 9.388.

• What is the exact contract specification - does the buyer promise to buy the index in half a year? For which price - the current S = 9.361?
• If so, why is F not more than S?
• What is the theoretical formula? I thought the price F of the future on the underlying S should be F = S exp(r Delta_t). Given the interest rate r is today about 0.5% p.a. and Delta_t is about 0.5, I should expect about F = 9.361*exp(0.25%), but at least more than S.

9388 is the last price but it is not where the future is trading right now. If you look at the bid/ask it tells a different story.

For example a few minutes you would have seen:

• spot (index) price = 9329
• June Future: price = 9388, bid = 9363, ask = 9365

So had you wanted to buy the June future you would have paid 9365, not 9388, which is just a stale price. The reason is that for financial futures, unless you are running a very specific arbitrage, it makes little sense to go for longer dated future and the first contract is the most liquid. The June contract has only traded 18 contracts today vs. more than 50,000 for the Dec 14 contract.