# Premium Index

## Overview

The Premium index is a trading indicator that measures the price difference between futures contracts and the spot market. It provides traders with insights into market sentiment, indicating whether participants expect prices to rise or fall in the future. This indicator is particularly useful for predicting market reversals and adjusting trading strategies accordingly.

## Interpretation

### Examples 

1. **Going Long on Positive Premiums**: If the futures premium is positive, indicating that futures prices are higher than the spot prices, it may suggest that the market expects the asset's price to increase. Traders might consider going long on futures contracts, anticipating capitalizing on the expected price rise.
2. **Short Selling on Negative Premiums**: Conversely, if the futures premium is negative, meaning futures prices are lower than the spot prices, it could signal that the market anticipates a decrease in the asset's price. In this scenario, traders might consider short selling futures contracts, aiming to profit from the predicted decline in prices.

## Indicator Triggers

<figure><img src="/files/cTwbRqcGgd5wihOlLsHY" alt=""><figcaption></figcaption></figure>

*Available Basic Triggers:*

* [Cross level](/indicators/basic-triggers.md#cross-level)
* [Sustain level](/indicators/basic-triggers.md#sustain-above)
* [In zone](/indicators/basic-triggers.md#sustain-in-zone)


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