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Futures pricing and div yield
If div growth on an equity index unexpectedly increases and I hold a short position on an index future I thought I benefited, but schweser exam 5 afternoon session says the LONG gains.
Their rationale: Higher div means index value increases and all else equal, the long gains.
My rationale: Higher div yield lowers futures prices so if I'm short the future to sell at a fixed price on a certain date my short position benfits.
A higher div yield makes futures prices lower I thought.
What do you gusy think here?? Which side of the future gains when div yields increase? |
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