Fair Value = Cash [1 + r(x/360)] – Dividends
Here, cash denotes the current value of the security, r is the prevailing interest rate charged by the broker, x is the number of days left in the contract, and dividends refer to the number of dividends that the investor will receive before the expiration date.
The following formula is used to calculate fair value for stock index futures: = Cash [1+r (x/360)] - Dividends.