      Traders who are bearish on the market will want to lighten up theirequities positions. Because of the relatively high transaction costsassociated with equities trading in comparison to futures trading, manyinstitutional traders will hedge, rather than lighten up, their outstandingequities positions by selling the futures contract as insurance againstdepreciation of the equities position. Because traders do this, the futuresindex will react quicker than the cash market. This is why so many tradersuse the futures as a leading indicator of stock movements. For example,when bearish traders begin selling futures contracts, the futures premiumwill drop. Depending upon current market sentiment, the premium that isaccepted as "fair value" will fluctuate. However, if the futures premiumdrops too much, arbitrageurs will initiate program trades to capitalize onthe imbalance, bringing the market back into sync.