Why would the futures on a single stock (no dividend), trade at a lower price compared to the actual stock price. Is it from futures factoring in bankruptcy risk?
future doesnt have counterparty risk, i dont know about borrowing costs for this stock and going short futures - it might have some influence, but i think it is pure arb as F=S*e^(r-d)
if there is no borrow (or negative rebate) then it can exist without arbitrage opp. that said, all equity holders are better off selling the spot and longing the future
I don’t know about that - there’s tax consequences all over that and many investors can’t own stock futures. Anyway, backwardation in single stock futures just means the borrow has gotten difficult/expensive.